Meta cuts 8,000 jobs to fund AI infrastructure as capital expenditure soars to $145 billion

Mark Zuckerberg says Meta is cutting 8,000 jobs to pay for AI infrastructure -- insatiable compute demand means the company can't rule out further headcount reductions

Compute costs are crowding out headcount at the company that just raised its 2026 capex forecast to $145 billion. Meta CEO Mark Zuckerberg told employees at a company town hall on Thursday that the roughly 8,000 planned layoffs are a direct consequence of the company's ballooning AI infrastructure budget, Forbes reports. The cuts, which affect about 10% of Meta's workforce and are set to begin on May 20, come the same week the company raised its full-year 2026 capital expenditure forecast to between $125 billion and $145 billion, up from a prior range of $115 billion to $135 billion. "We basically have two major cost centers in the company: compute infrastructure and people-oriented things," Zuckerberg said during the town hall, as heard by Reuters. With more capital flowing toward AI hardware, he said, there is less available for headcount. He also declined to rule out further reductions later in the year. Meta spent $72.2 billion on capex in all of 2025. The midpoint of its new 2026 guidance would nearly double that figure in a single year. The timing undercuts any suggestion that Meta is cutting jobs out of financial necessity. The company's Q1 2026 earnings, reported on Wednesday, showed revenue of $56.31 billion, a 33% increase year over year, while net income hit $26.8 billion. Q1 capital expenditure alone reached $19.84 billion, and CFO Susan Li told investors she couldn't predict the company's optimal long-term workforce size given how quickly AI capabilities are evolving. Zuckerberg's comments land in the middle of a growing debate about whether companies are using AI as a convenient justification for workforce reductions they would make regardless. OpenAI CEO Sam Altman raised the issue in February, telling CNBC at the India AI Impact Summit that some firms engage in "AI washing" by attributing layoffs to the technology when the actual reasons lie elsewhere. Zuckerberg's explanation is more specific than most, explicitly pointing to infrastructure spending rather than AI-driven productivity gains as the driver, but that specificity raises its own tension. Nvidia's VP of applied deep learning, Bryan Catanzaro, said earlier this week that compute already costs more than the employees on his team, and a 2024 MIT study also found AI automation was economically viable in only 23% of vision-related roles. If AI infrastructure is currently more expensive than the labor it supplements, the return on trading one for the other remains a dubious strategy. Some employees have understandably criticized Zuckerberg and other executives on Meta's internal message board over the layoffs and a separate initiative to monitor employee productivity through mouse and keyboard activity tracking. "Getting everyone internally to use AI tools and getting to do the work more efficiently is not the thing that's driving layoffs," but added that Meta will monitor "how all this stuff trends." These are the largest cuts at Meta since the 2022 and 2023 rounds that shed roughly 21,000 positions. Across the broader tech industry, more than 80,000 workers have been laid off in 2026 so far. Follow Tom's Hardware on Google News, or add us as a preferred source, to get our latest news, analysis, & reviews in your feeds.

Meta and Microsoft have joined the tech layoff tsunami. Is AI really to blame?

Meta and Microsoft are the latest software companies to announce big cuts to their global workforce. Both companies are also making big investments in artificial intelligence (AI). The link seems obvious. Meta's chief people officer, Janelle Gale, said the job cuts - about 10% of staff or almost 8,000 workers - serve to "offset the other investments we're making". Meta boss Mark Zuckerberg has previously spoken about a "major AI acceleration" with spending in excess of US$115bn planned this year. Microsoft is also betting big on AI. The company also just announced early retirement packages for about 7% of its US workforce. The two tech giants join Atlassian, Block, WiseTech Global and Oracle, who have all made similar announcements this year, each evoking AI without outright blaming it. What is happening here? How we understand these layoffs depends on what we think AI is, and what implications it will have. Broadly speaking, there are three ways of looking at it: that AI is superintelligence, that it's mostly hype, and that it's a useful tool. The end of white-collar work? In the first view, AI is emerging superintelligence. It is a new kind of mind, that learns, reasons, and will soon outperform humans at most cognitive tasks (hint: it's not!). The job losses are not just a corporate restructuring. They are an early tremor of something seismic. In February 2026, AI entrepreneur Matt Shumer put this view vividly - comparing the current moment to the strange, quiet weeks before COVID-19 broke into global consciousness. Most people, he argued, haven't yet realised we are facing an "intelligence explosion". The essay drew significant criticism. Commentators noted it contained little hard data and read at times like a pitch for Shumer's company's own AI products. But it captured a genuine anxiety. Something real is happening in software engineering, at least, where tasks are well-defined and success is easy to verify. But the leap to "all white-collar work will be automated" is a big one. The view that AI is a kind of universal mind that learns and improves itself is far-fetched. And most professional work is far messier than coding: ambiguous briefs, competing stakeholder interests, outputs that are hard to verify, and shifting success criteria. Coding may be a canary in the coal mine, but coal mines and boardrooms are very different places. Are tech companies winding back hiring sprees? The second view sees the conversation around AI as mostly hype. AI is being invoked as cover. Companies that hired aggressively during the pandemic boom, and now face financial pressure, are blaming AI as the more palatable explanation. OpenAI CEO Sam Altman called this dynamic "AI washing": companies blaming AI for layoffs they would have made regardless. For example, Meta announced in March it would shut down its Metaverse platform Horizon World by June. Reality Labs, the division developing the technology, employed 15,000 people as of January 2026. We don't know in detail the make-up of the present job cuts, so Meta may just be repackaging earlier failures as AI-driven productivity gains. Another cynical reading suggests that laying off workers in the name of AI is a way to drive up stock prices. When Block invoked AI and cut nearly 4,000 roles, its stock jumped the following day. Announce AI-driven layoffs and you may find investors reward you for being future-focused. It is a historically familiar trick: technology has repeatedly served as convenient cover for financial restructuring. Are layoffs a way to make staff use AI? The third view is more nuanced. It sees AI as a powerful tool, but one that companies will need to transform themselves to take advantage of. This has implications for what jobs are needed and in what quantities. We think this view has the most merit. On this reading, the tech leaders believe AI will change how software gets built. But they don't know exactly how. So they do what tech companies often do when faced with uncertainty: they create pressure. They cut headcount staff, expect those remaining to produce just as much as before, and force teams to find ways to meet those expectations using AI. It's not a bet that AI will do everything, but that the pressure will force humans to work out how to use AI to increase productivity. This also lines up with industry experience. For example, Google chief executive Sundar Pichai claims a 10% increase in engineering speed from AI adoption across the company. This could tally with cuts of around 7-10% of total workforce for most of the mentioned companies. What this means for knowledge workers These three views are often presented as mutually exclusive. In practice, all three expectations exist simultaneously. The honest answer to "what is really happening here" is probably "a bit of everything". What is true is that software development tends to be an early indicator of broader shifts in knowledge work. Productivity benefits from AI are real for those who adopt it. Yet adoption is unevenly distributed, and lags in less technical industries. In this context, the ability to understand AI and make good decisions about how and where to use it is becoming a baseline professional skill. The workers most at risk are not necessarily those whose tasks can be replicated by AI. They are those who wait for pressure to arrive from outside rather than getting ahead of it now. We will have answers to the question of whether AI is mostly hype or a useful tool in the next few years. If Meta, Microsoft, and their peers rehire staff with different skills, redesign workflows, and emerge genuinely more capable, the case for useful AI looks good. If they simply pocket the payroll savings, the cynics were right. If you want to know where tech companies are going, don't look at what they cut - watch what they hire.

Zuckerberg tells Meta employees the layoffs are about capex, not AI productivity

At a Thursday town hall, the Meta CEO made the explicit trade-off he had previously left implicit: 'We basically have two major cost centres in the company: compute infrastructure and people-oriented things.' The chief people officer also declined to rule out additional layoffs Meta CEO Mark Zuckerberg attributed the company's upcoming layoffs to its rising capital expenditure on AI infrastructure and declined to rule out further job cuts during a town hall meeting with employees on Thursday, Reuters reported. The session was the first time Zuckerberg has addressed staff directly about the layoffs. "We basically have two major cost centres in the company: compute infrastructure and people-oriented things," Zuckerberg told employees, according to details of the session shared with Reuters. "If we're investing more in one area to serve our community, then that means we have less capital to allocate to the other. So that means we do need to take down the size of the company somewhat." Chief people officer Janelle Gale, also speaking at the meeting, did not rule out the possibility of further layoffs. CFO Susan Li, on Wednesday's earnings call, said Meta does not yet know what its 'optimal' long-term workforce size will be given the pace of AI advancements. The remarks make explicit what Meta had previously framed only as 'efficiency'. The May 20 layoffs of approximately 8,000 employees, roughly 10% of the company's 78,865-person workforce, are now positioned by the CEO himself as a direct trade-off against the AI infrastructure spending Meta unveiled at Wednesday's Q1 earnings. Meta raised its full-year 2026 capex guidance to $125-$145 billion, up from $115-$135 billion, sending shares down 9% after hours. Additional layoffs are planned for the second half of 2026. Zuckerberg's most carefully constructed line of the session was about whether AI productivity itself is driving the cuts. "Getting everyone internally to use AI tools and getting to do the work more efficiently is not the thing that's driving layoffs," he said, a denial that holds the line on the explicit AI-replaces-workers narrative his peers at Microsoft and Salesforce have flirted with. He immediately added the qualifier: "We'll see how all this stuff trends." He said the company would "be able to share more soon." The hedge matters because, on Meta's own previous statements, AI tools are reshaping engineering productivity at the company. Zuckerberg has publicly claimed that output per engineer has risen 30% since early 2025 driven by AI coding tools, and that power users have seen an 80% year-on-year increase. Either those productivity gains are not yet meaningful enough to drive workforce decisions, or the framing for employees in a town hall on the eve of layoffs is being calibrated more carefully than the framing for analysts and investors. Both can be true. Zuckerberg also offered an unusually candid admission about the longer horizon. "I wish that I can tell you that I have a crystal ball plan for the next, like, three years of how all this stuff is going to play out. I don't. I don't think anyone does," he said. The statement, made to a workforce that has now been told that further cuts are possible and that the company's optimal long-term size is unknown, is a striking departure from the corporate certainty that typically accompanies large restructurings. The 'two cost centres' framing is the cleanest version yet of an argument that has been made implicitly across the tech sector for the past 18 months. Meta and Microsoft announced 23,000 combined job reductions in the same week, with the same underlying logic: companies are not cutting because they cannot afford their workforces, but because they have decided to redirect that capital to AI infrastructure instead. Meta's 2025 net income exceeded $22 billion in the fourth quarter alone. The company is profitable. It is choosing to spend the money on machines. Zuckerberg's remarks on Thursday turn the implicit into the explicit. The trade-off is not between revenue and expense; it is between two categories of expense. Compute infrastructure is the category Meta has decided to grow. Personnel is the category it has decided to shrink. Both are paid for from the same pool of capital. Both, ultimately, generate value through the products Meta sells to advertisers. The bet is that compute generates more of that value per dollar than headcount. The wider industry context makes the trade-off legible. Oracle eliminated up to 30,000 employees in March to fund its $156 billion AI infrastructure commitment. Atlassian cut 1,600 jobs and replaced its CTO with two AI-focused executives. Amazon cut 16,000 corporate jobs in January. Block eliminated 4,000 roles. The tech sector has shed more than 95,000 jobs across 247 layoff events in 2026, and the explanations have converged. Companies that previously framed cuts as performance-driven, or as adaptations to slowing growth, are now stating the AI capital reallocation directly. Meta's town hall is the latest and clearest example of a CEO saying it on the record to his own employees. What Zuckerberg did not say, and what neither he nor Janelle Gale nor Susan Li would commit to, is whether the layoffs scheduled to begin May 20 represent the bottom of the cycle or a midpoint. The CFO's acknowledgment that Meta does not know its optimal long-term size, the chief people officer's refusal to rule out further cuts, and the CEO's explicit linkage between capex and headcount together leave Meta's remaining 71,000 employees with a structural uncertainty: their continued employment is contingent on a capex line item that the company has been raising every quarter. Meta's capex of $125-$145 billion in 2026 is roughly double its 2025 spend, and nearly all of it goes to data centres, GPUs, custom silicon, and the infrastructure supporting Llama models and Meta Superintelligence Labs. The Hyperion data centre in Louisiana alone is a $10 billion, five-gigawatt facility. The Prometheus supercluster in Ohio is a one-gigawatt project coming online this year. Each new infrastructure commitment, on Zuckerberg's own logic, comes from the same capital pool that pays for headcount. The arithmetic of the town hall is not difficult to extend forward, even without a crystal ball. Whether the trade-off works, whether the AI infrastructure being built generates returns commensurate with the human capital being eliminated, will be the defining question for Meta and for the broader Big Tech cohort over the next several years. The market's 9% sell-off after Wednesday's earnings suggests at least some investors have begun pricing in the risk that it does not.

Meta cuts 8,000 jobs and Microsoft offers first-ever buyouts as Big Tech converts payroll into AI capital expenditure

Summary: Meta and Microsoft announced workforce reductions on the same day, April 23, affecting up to 23,000 positions combined. Meta is cutting 8,000 jobs (10% of staff) and cancelling 6,000 open roles effective May 20, while Microsoft launched its first-ever voluntary retirement programme offering buyouts to up to 8,750 US employees whose age plus years of service equals 70. Both companies reported record revenues. Both are spending record amounts on AI infrastructure. The cuts are not about distress but about substituting human payroll for AI capital expenditure, a pattern that has now reached 96,000 tech workers in 2026. Meta and Microsoft announced workforce reductions on the same day, April 23, for what appears to be the same reason. Meta told employees it would cut approximately 8,000 jobs, 10% of its global workforce, effective May 20, and cancel 6,000 open positions. Microsoft disclosed its first voluntary retirement programme in 51 years, offering buyouts to up to 7% of its American employees, roughly 8,750 people, under a formula that requires a worker's age plus years of service to equal 70 or more. Between the two companies, up to 23,000 positions will be eliminated or never filled. Both companies reported record revenues in their most recent quarters. Both are spending more on artificial intelligence infrastructure than they have ever spent on anything. The cuts are not about financial distress. They are about what the money is for. Meta's chief people officer, Janelle Gale, wrote in an internal memo leaked before the company intended to release it that the layoffs were "part of our continued effort to run the company more efficiently and to allow us to offset the other investments we're making." The investments she was referring to are considerable. Meta has guided capital expenditure of $115 billion to $135 billion for 2026, nearly double the $72 billion it spent in 2025, directed almost entirely at data centres, Nvidia GPUs, custom silicon, and the infrastructure supporting its Llama model ecosystem and the newly created Meta Superintelligence Labs. Full-year 2025 revenue was $201 billion. Full-year 2025 net income was $22.8 billion in the fourth quarter alone. The company is not cutting because it cannot afford its workforce. It is cutting because it would rather spend the money on machines. Microsoft's calculus is quieter but structurally identical. The company's "Rule of 70" formula, which makes employees eligible for a buyout if the sum of their age and years of service reaches that threshold, disproportionately targets workers in their fifties and sixties who built the pre-AI Microsoft. Sales incentive plan employees are excluded. Full details will be communicated on May 7. CEO Satya Nadella warned in October 2025 that 2026 would be "messy" as the industry moved from AI demonstrations to AI integration. Second-quarter fiscal 2026 revenue was $81.3 billion, up 17% year over year. Azure grew 33%, with AI services contributing 16 percentage points of that growth. Microsoft's voluntary retirement programme for US workers is framed as a benefit. Its effect is to accelerate the departure of the employees least likely to transition into AI-native roles, using their severance as a rounding error against the hundreds of billions the company is committing to data centres, Copilot, and its OpenAI partnership. The 23,000 positions affected on April 23 are not an anomaly. They are the latest entries in a ledger that has been growing all year. Oracle eliminated up to 30,000 roles in March, roughly 18% of its workforce, to redirect an estimated $8 billion to $10 billion in annual cash flow toward a $156 billion AI infrastructure buildout. Amazon restructured 16,000 positions. Dell cut 11,000. Snap reduced headcount by 1,000, or 16%. According to industry trackers, more than 96,000 tech workers have lost their jobs in 2026 so far, a 40% increase over the same period in 2025. Oracle eliminated up to 30,000 roles to fund $156 billion in AI infrastructure, and its remaining performance obligations stood at $523 billion. It posted a 95% jump in net income the quarter before it made the cuts. The companies doing the firing are not the ones losing money. They are the ones making the most. Mark Zuckerberg has now cut approximately 25,000 jobs at Meta since 2022. The first two rounds, 11,000 in November 2022 and 10,000 in March 2023, were branded as the "Year of Efficiency" and came after the company's stock had collapsed on metaverse spending and a digital advertising downturn. Those cuts were defensive. The current round is offensive. Meta's stock is roughly flat year to date because investors already expect the headcount reduction to fund AI acceleration. Bank of America projects $7 billion to $8 billion in annualised savings. Wedbush's Dan Ives said the company is using AI to "automate tasks that once required large teams." CNBC's Jim Cramer called it a "screaming buy." Meta's earlier rounds of cuts across Reality Labs and recruiting in January and March 2026 eliminated approximately 2,200 positions and slashed the Reality Labs budget by 30%, suggesting the April announcement is the culmination of a restructuring that has been under way for months, not a sudden decision. What separates the Meta and Microsoft announcements is not the logic but the method, and the method reveals something about each company's relationship with its workforce. Meta is firing people. The memo from Gale described the cuts as involuntary and companywide, touching every major business unit. Engineers are being reassigned to a new Applied AI division and a small-business advertising group. The language shifted from the January 2025 round, when Zuckerberg framed the cuts as removing "low performers," to April 2026, when the framing became "contribution" and "efficiency," an acknowledgment that the people being let go are not necessarily underperforming. They are in the wrong part of the company. Hours before the April layoff memo leaked, Meta had awarded its six most senior executives stock options worth up to $921 million each, tied to a $9 trillion market capitalisation target by 2031. Meta awarded executives up to $921 million in stock options while cutting staff, and in the same period reduced stock-based compensation for rank-and-file employees by 5% to 10%. Microsoft, by contrast, is offering to pay people to leave. The voluntary retirement programme is unprecedented in the company's history and is designed to avoid the reputational damage of mass involuntary layoffs while achieving the same structural outcome. But calling it voluntary obscures the targeting. The Rule of 70 formula means a 55-year-old with 15 years of service qualifies. A 30-year-old with five years does not. The programme selects for age and tenure, not performance, and the divisions most affected, Azure cloud operations, gaming, and global sales, are the ones where automation via Copilot and AI agents is furthest advanced. Microsoft had already been tightening performance management throughout 2025, instructing managers to issue 30% more performance improvement plans and barring employees who failed benchmarks from reapplying for two years. The buyout is the softer instrument. It follows the harder ones. A survey of 1,000 US hiring managers by Resume.org found that 55% expect layoffs at their companies in 2026, and 44% identified AI as the primary driver. A Motion Recruitment study found that AI adoption is slowing hiring for entry-level and generalised IT roles while creating intense demand for AI specialists. The term analysts are using is the "AI employment paradox": companies are simultaneously cutting headcount and investing record sums in AI infrastructure, producing a labour market in which aggregate spending is rising and aggregate employment is falling. Economists quoted by CNBC described the situation as an AI-driven labour crisis that "is here, not coming in the future." A poll found that 57% of Americans think AI is advancing too fast, and 79% are concerned the government has no plan to protect workers from AI job losses. No legislative or regulatory response has materialised. The human cost of AI-driven tech layoffs is difficult to measure in aggregate because companies attribute cuts to AI without demonstrating that AI systems have actually absorbed the displaced work. The term "AI-washing" has emerged to describe this pattern: a company announces layoffs, cites its AI strategy in the same breath, and lets investors draw the inference that machines are replacing humans even when the company has no mature, scalable AI implementation capable of doing so. Meta's new Superintelligence Labs and Meta Compute division exist on paper and in press releases. Whether they can perform the work of 8,000 eliminated employees is a question that will not be answered for years. What can be answered now is where the money is going. Meta is spending $115 billion to $135 billion on AI capital expenditure. Microsoft spent $81 billion in the last fiscal year on capital investment and has committed to spending more. The salaries of the people being cut are a fraction of those figures. The cuts are not funding the AI buildout. They are a signal that the AI buildout has made the current workforce configuration obsolete in the eyes of management, whether or not the technology has made it obsolete in practice. Since 2020, nearly 900,000 tech workers have been laid off globally, according to the tracking site Layoffs.fyi. The first wave, in 2022 and 2023, was attributed to the unwinding of pandemic-era hiring. The second wave, in 2024 and 2025, was attributed to restructuring around AI. The third wave, now under way in 2026, no longer needs attribution because the companies are stating the connection explicitly. Oracle said it was cutting jobs to build AI data centres. Meta said it was cutting jobs to offset AI investments. Microsoft structured a buyout programme that selects against the employees least aligned with its AI future. The direction is not ambiguous. The question is whether the substitution is real, meaning AI genuinely performs the work the displaced employees did, or whether it is financial, meaning the companies are converting payroll into capital expenditure because Wall Street rewards the latter more than the former. On April 23, the market offered its answer. Meta's stock fell 2.3% on the layoff news. It would have fallen further if investors thought the cuts were a sign of weakness rather than a down payment on a thesis they already believe. Twenty-three thousand positions, eliminated or abandoned in a single day by two of the most profitable companies on earth. The reactor did not change. The spreadsheet did.

Zuckerberg blames Meta layoffs on AI costs, says "compute and infrastructure" and "people oriented things" are biggest financial drain right now

* Around 8,000 of Meta's nearly 80,000 workers are set to lose their jobs this month * Company capex is expected to rise $10bn to $145bn * Revenue is up 33%, but shares are down 9% Meta is reportedly planning to cut around 8,000 jobs, or 10% of its current headcount, as soon as this month amid ongoing cost-cutting measures, with further layoffs not ruled out either. Chief People Officer Janelle Gale explained the drive for agility amid shifting priorities and competition from rival companies, but with future layoffs potentially on the cards, worker morale is believed to be under huge pressure with employees demanding more transparency. The company has already made around 1,700 workers redundant in 2026 (via layoffs.fyi), and at least 4,300 in 2025. Meta continues to explore job cuts Speaking about the job cuts, CEO Mark Zuckerberg implied they were largely driven by growing AI infrastructure spend across data centers and compute. Company capex continues to rise, estimated to be as high as $145 billion, which has ultimately forced savings elsewhere. This number is up by a not-so-insignificant $10 billion from previous projections (via Forbes). Zuckerberg emphasized that AI itself is not replacing jobs, however the tech can still be attributed to job losses indirectly with Meta focusing on big AI spends across infrastructure. He has already previously acknowledged that AI does allow leaner teams to work more efficiently, though, so it's not as if AI isn't responsible for some direct job losses. Even though the companies has fired thousands of workers in recent years, it's also re-hired across other areas of the business, with headcount up 1% year-over-year. However, despite a "milestone quarter," with a 33% rise in revenue to $56.31 billion, company shares are down about 9% following the company's latest earnings post, with investors more likely worried about the major capex spend than labor shifts. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

Tech has a ton of layoffs and AI disruption and the rest of corporate America doesn't. One Silicon Valley CEO knows why | Fortune

Tech layoffs tied to AI are dominating headlines. Coders are being displaced by agents. Software headcount is shrinking. The message from Silicon Valley is that AI is restructuring the workforce in real time -- and that the rest of corporate America should brace for the same. "My job these days," Levie said Monday on a16z's podcast, "is just bring reality to the valley, and then bring the valley to reality." It's a line that sounds glib until you understand what he actually means -- and why the gap between AI's impact in tech versus the broader Fortune 500 may be one of the most misunderstood economic dynamics of the moment. The reason AI is so disruptive in Silicon Valley right now is specific to Silicon Valley: its workers are engineers, its outputs are verifiable, and its tools are flexible. When an AI agent writes code, a human can test whether the code works. When something breaks, an engineer debugs it. The feedback loop is tight, the productivity gains are measurable, and the headcount math changes accordingly. Walk into a regional bank, a healthcare network, or a 30-year-old manufacturer, and almost none of those conditions apply. Workers are less technical. Data is scattered across legacy systems built over decades. And the consequences of an AI agent making a wrong call aren't a failed unit test -- they're a botched claim, a miscalculated payment, or a compliance violation. "The workflows are quite different, the users are less technical, the data is much more fragmented, the systems are much more legacy," Levie said. That's not a temporary lag that will resolve itself in a few quarters. It's a structural difference that could take years to close. Making things worse: many large companies are trying to force AI adoption from the top down, with predictably poor results. Boards pressure CEOs. CEOs hire consultants. Centralized AI initiatives launch without buy-in from the people who'd actually use them. Martin Casado, general partner at a16z, described the failure mode with some frustration: "They have some centralized project that -- nobody knows how it works. They haven't aligned their operations, and those things will fail." That failure mode has a cultural dimension too. May Habib, CEO of AI platform Writer, recently described Fortune 500 executives as having a "collective panic attack" about AI's implications -- a vivid illustration of the kind of reactive, top-down pressure Casado is describing. The desperation to show progress has produced some genuinely strange outcomes. Levie recounted being told by an employee at a large company -- he didn't name it -- that workers there are being measured on AI adoption by token usage, the computational units that run through AI models. The result: employees have set agents to perform "useless tasks" purely to hit their numbers. It's a near-perfect illustration of Goodhart's Law -- as soon as a measure becomes a target, it ceases to be a good measure -- and of how far some organizations are from meaningful AI transformation. Even well-run enterprise AI programs collide with the same structural obstacle: integration. Steven Sinofsky, the former top Microsoft executive, now a board partner at a16z, put it plainly. "Any enterprise of a thousand people or more -- or that's older than 10 years -- is just a mass of stuff sitting there waiting to be integrated," he said. "AI actually doesn't help to integrate anything." What that means in practice: AI agents, like any new employee, need access to the right systems and data to do useful work. In most large companies, that access is informal, undocumented, and navigated through relationships. A human worker figures it out by asking a colleague. An AI agent has no colleague to ask. Until companies do the hard, expensive, unsexy work of cleaning up their data and modernizing their access controls, agents will keep hitting walls. That helps explain why enterprise AI adoption looks wide but shallow: 72% of enterprises have at least one AI workload in production as of Q1 2026, up from 55% in 2024 -- but only 28% describe their AI adoption as "mature." Just 38% of employees use generative AI daily, even as 65% of enterprises claim to use gen AI regularly. The gap between what companies say they're doing with AI and what's actually happening on the ground is enormous. One major company is betting that meeting agents where they are -- rather than forcing them through legacy human interfaces -- is the path forward. Salesforce launched "Headless 360" last month, making its entire platform -- data, workflows, and business logic -- accessible to AI agents without a browser or human UI. CEO Marc Benioff framed it bluntly at the company's TDX developer conference: "No browser required. Our API is the UI." Levie sees it as a harbinger. If enterprise software is rebuilt to be consumed by agents rather than humans, the addressable market for "users" expands by orders of magnitude -- and the integration wall gets lower. But that rebuild is still largely ahead of us, not behind us. Here's where Levie's argument gets most interesting -- and most at odds with the prevailing Silicon Valley narrative on jobs. In the narrow slice of the economy that looks like a tech company, AI-driven displacement is real. But in the broader Fortune 500, Levie says the math actually runs the other way: more AI-generated code means more complex systems, which means more engineers are needed to manage them when things go wrong. "The funniest concept is that the more code we write, the less we would need engineers," Levie said. "It would be the opposite, because now your systems are even more complex than before -- which means you're going to be running into even more challenges when you need to do a system upgrade, or when there's downtime, or when there's a security incident." It's a historically grounded point. The internet didn't shrink IT departments -- it built them. Cloud computing didn't displace systems integrators -- it created a generation of them. The workers getting squeezed today are concentrated in a particular kind of role, at a particular kind of company, in a particular geography. Wall Street, notably, isn't waiting for the debate to resolve. Of 28 tech companies that announced AI-related layoffs this year, 17 saw their stock prices rise on the day of the announcement -- a signal that investors are actively rewarding headcount destruction in the sector. (This is known as "AI washing," a phrase memorably repeated by Sam Altman himself.) That dynamic has no analog in the broader Fortune 500, where AI-driven cuts remain rare enough to be newsworthy when they happen. For everyone reading layoff headlines and wondering when the wave will reach their office: if Levie is right, the answer for most of the Fortune 500 isn't displacement -- it's a long, painful, expensive technology upgrade. Which is a different problem entirely.

New figures show March 2026 was the worst month for tech job layoffs since 2024 -- but it's probably going to get worse

* March 2026 was the worst month for layoffs since 2024 * Tech companies are cutting workforces to invest in AI * Entry level jobs are shrinking, and other jobs could be next March 2026 has been the worst month for tech job layoffs in the past two years, with over 38,000 employees now out of work. According to layoff tracking website Layoffs.fyi, the majority of the layoffs in March come from Oracle, who slashed 30,000 jobs in March following a rocky end of year performance and a $300 million deal with OpenAI. Atlassian also announced a cut of 1,600 jobs with a shift towards a new AI strategy, and Epic Games cut 1,000 jobs after experiencing an engagement drop with its hit game Fortnite. The worst is yet to come In March, Meta announced plans to cut 20% of its workforce, or around 16,000 employees, but have since confirmed a 10% reduction, or 8,000 employees, instead. Several other companies, including Microsoft, Block, Amazon, and eBay have all cut their workforces over the past few months. Many companies are turning towards AI and automation to increase efficiency, productivity, and revenue. This comes with the unfortunate downside that some employees are therefore seen as superfluous, and their jobs cut. As the Wall Street Journal reports, this does come with a caveat. Many companies are attempting to outspend each other on AI, which has become somewhat of an unofficial metric for a company's success. In order to foot the bill for new data centers and chips, jobs are usually the first to go. More and more money gets spent, and more and more CEO's have to justify that the investment in AI is sound, and is actually delivering the benefits it has promised. If not, cut more jobs and invest more in AI. It could be argued that companies are simply compensating for the rapid overhiring that occurred following the end of the COVID-19 pandemic, but the number of job openings has now fallen below its 2018 peak, according to the US Bureau of Labor Statistics' Job Openings and Labor Turnover Survey (JOLTS). AI is already shrinking the job market for new graduates. In a 2025 interview with Axios, Anthropic CEO Dario Amodei said that AI could wipe out half of all entry-level white collar jobs within the next five years. If the efficiency gains and productivity increases AI companies are promising come true, that could bite further into white collar jobs as a whole. Follow TechRadar on Google News and add us as a preferred source to get our expert news, reviews, and opinion in your feeds.

The next stage of silent firing

In October 2024, I wrote that the tech industry was entering an era of silent firing. Jobs were not being eliminated overnight, but subtly reshaped in ways that encouraged attrition, as companies quietly prepared for large-scale automation. At the time, this was largely a warning. With age, it looks more like a pattern. Amazon's January 2026 announcement of 16,000 layoffs brings corporate staff reductions to roughly 10% of its workforce. Publicly, leadership has been careful to separate these cuts from artificial intelligence. As CEO Andy Jassy put it after earlier reductions, "the announcement that we made...was not really financially driven, and it's not even really AI-driven, not right now at least." Yet in parallel, Jassy has been explicit about the role AI is already playing across the company, stating that "in virtually every corner of the company, we're using generative AI to make customers' lives better and easier," and that new AI-driven agents are "coming, and coming fast." The tension between these two statements highlights a growing accountability gap: AI is framed as transformative when speaking to investors, but incidental when explaining workforce reductions. A NEW MODEL IS NEEDED AFTER AI INVESTMENTS Let's look at the case of Meta (Facebook). They will either have to trim other expenses significantly or start charging users. Meta's current global average annual revenue per user sits at roughly $13-14. On the higher earning side are the U.S. and Canada, at around $68 per user. Seeing as Meta's fastest user growth markets are in Asia-Pacific and developing countries, that $13-14 figure is more likely to go down rather than up. Consider Meta's commitment to spend $600 billion on infrastructure by 2028. Divide this by 3 billion Facebook users, and they would need to squeeze an additional $200 per year from each user just to break even on this investment alone. Said differently, they would have to ~15x their annual revenue per user to match this spend. This does not factor in their aggressive acquisitions in the AI space, which adds to payroll and layoff costs post-acquisition. The math is simple: Meta will need to find new revenue sources from a user base already inundated with ads. Or more likely, the most obvious target is to cut expenses, with headcount made redundant by their own AI investments.

Tech layoffs surge amid AI push -- but there's more to the story

(NewsNation) -- Tech layoffs have surged to their highest level in years, but cuts attributed to AI may be driven more by investment in the technology than by it replacing workers. Nearly 90 tech companies announced layoffs affecting roughly 82,000 employees in the first quarter, up from about 30,000 a year earlier and the largest quarterly total since early 2023, according to the tracking site Layoffs.fyi. Meta last Thursday said it will cut 10 percent of its workforce, or roughly 8,000 employees, as it looks to run more efficiently and offset other investments. That same day, Microsoft said it was offering early retirement to thousands of long-serving employees. The workforce reductions follow similar moves by Amazon and Oracle and come as major tech companies pour hundreds of billions of dollars into AI infrastructure. "Companies are shifting budgets toward AI investments at the expense of jobs," Andy Challenger, chief revenue officer for Challenger, Gray & Christmas, said in a March report. So far in 2026, AI has been cited as a factor in roughly 27,600 job cuts, or about 13 percent of all job cut plans, according to the firm -- up from around 5 percent in 2025. AI investment or job replacement? What's driving tech layoffs While the uptick in layoffs linked to AI is notable, it's less clear that those cuts reflect AI directly replacing workers. Instead, they may be tied to the AI arms race, as tech giants shift spending from personnel to assets like data centers and other tools. That narrative has been blurred by the companies themselves, eager to pitch a forward-looking AI story to shareholders rather than acknowledging past overhiring mistakes. The strategy has been dubbed "AI-washing" with companies exaggerating their AI adoption to appear more innovative. In a recent interview, venture capitalist Marc Andreessen attributed recent layoffs to higher interest rates and a "complete loss of discipline" in hiring during the pandemic. "The hiring binge that companies went on in COVID was just wild," Andreessen said. "Essentially every large company is overstaffed." He added: "Now they all have the silver bullet excuse, 'Ah, it's AI.'" Evidence of widespread job losses from AI-driven replacement remains thin, recent analyses show, though that may change in the years ahead. According to Challenger, AI is the fifth most common reason for job cuts so far in 2026, trailing factors like market/economic conditions, restructuring and closures. For workers, the AI jobs story cuts both ways: jobs may be lost to fund AI, even if the technology isn't yet replacing them, but that also suggests the recent tech layoffs may be more cyclical than a sign of job obsolescence.

The Downgrading of the American Tech Worker

Everyone in tech is worried about layoffs. Since the beginning of the year, Block (formerly Square) cut its workforce nearly in half, Oracle began laying off up to 30,000 people, Amazon announced yet another reduction in force, Snap laid off around 15 percent of its staff, and Pinterest announced plans to do about the same thing. Microsoft recently announced its first-ever voluntary buyouts, targeting longtime employees, which some are reading as a prelude to deep cuts. Most of the firms are paring down workforces that grew enormously while interest rates were low. But all of them have at least something to do with AI. Some firms, like Oracle and Microsoft, are reallocating capital to massive investments in the technology. Block's leadership says it believes it can now run its firm with far fewer people, while Snap, in a more urgent cost-cutting mode, signaled that automation may save money. Job loss is the dominant fear as announcements pile up and employees absorb warnings about mass displacement from AI leaders like Anthropic CEO Dario Amodei. But two recent changes at Meta highlight another question: What does all this mean for the people who are left? The first, of course, is a layoff, which Meta characterized as part of a "continued effort to run the company more efficiently and to allow us to offset the other investments we're making." The firm has spent -- often haphazardly -- more than $70 billion developing AI so far, with plans to spend more in the coming year (in addition to spending a lot of its cash on AI and freeing up more through layoffs, the company has been selling tens of billions in bonds). The second change came just before the layoffs and was reported first by Reuters: Meta is installing new tracking software on U.S.-based employees' computers to capture mouse movements, clicks and keystrokes for use in training its artificial intelligence models, part of a broad initiative to build AI agents that can perform work tasks autonomously, the company told staffers. "The vision we are building towards is one where our agents primarily do the work and our role is to direct, review and help them improve," one memo said. "This is where all Meta employees can help our models get better simply by doing their daily work," said another. Just a few years ago in a healthier job market, installing screen-recording software on employee laptops would have been an enormous scandal for Meta and unthinkable for many of its employees, who were well compensated and in demand. Now, backed by the threat of more layoffs, their jobs are being both downgraded and assessed for possible automation (employees are indeed quite angry about this). These are common conditions in many industries in which workers have less leverage; indeed, even at Meta, subcontractors hired to moderate content and label data have long dealt with constant surveillance and threats of job loss and automation. Meta's new chief AI officer, Alexandr Wang, comes from this world: His startup, Scale AI, oversaw a vast workforce of contractors who did the "grunt work" involved in AI training and deployment and specialized in collecting the sorts of data Meta is now gathering by monitoring its own employees. It may be the case that collecting the mouse movements and keystrokes of thousands of Meta employees provides a real advantage in training AI models or designing agentic software. What's certain is that Meta believes it's in a position to dramatically renegotiate its relationship with its workforce. Into the early 2020s, jobs at big tech companies were extremely desirable, attracting qualified workers from across the economy and drawing ambitious young graduates away from jobs in finance, law, medicine, etc. Now, rather than a track to long-term job security in a futureproof industry, some of tech's most visible leaders are eagerly making a new offer to their employees: the prospect of downward mobility, limited freedom, and de-skilling. They're being told that they may be replaceable and that to find out if they are, they'll have to try to train their replacements. The destruction of the aspirational tech job is itself an aspirational project: We don't yet know if cutting a workforce to the bone and rolling out a bunch of AI tools is a path to success for an established tech firm, and anyone who tells you it's easy to guess what the workforce composition of a 2026 "technology" company will look like in 2029 is probably a little too confident in their forecasting skills. (It's also worth nothing here that Meta, a successful social-media company that is struggling to catch up with newer AI labs, has tended to chase industry trends, not lead or correctly anticipate them, for the past decade.) For now, though, the message being sent to many workers in America's most vibrant economic sector, a pillar of the economy's success for the past 50 years, is loud, clear, and being heard: We might lay you off soon, and even if we don't, your job isn't what it used to be.

Tech Layoffs: March Worst Month in Two Years as Companies Cut 38,000 Jobs

* Meta recently laid off 200 workers amid an AI push * AI is primarily replacing blue-collar workers * Pandemic-era hiring has also led to mass firings at firms Tech companies across the globe are working to integrate AI-powered tools into their daily workflows, citing higher efficiency and lower costs. This appears to be a great proposition for the tech firms, who can increase their margins, increase their profits, and keep their shareholders happy, even if they record the same revenue every quarter, year after year. However, this unprecedented AI adoption has led to massive layoffs across the industry. Another phenomenon fueling the dismissals is the mass pandemic-era hiring, when the blue-collar employees at tech firms ballooned exponentially. While companies laying off employees en masse is not new, March 2026 could have been the worst month for tech workers, seeing the highest number of layoffs in the past two years. Over 92,000 Workers Laid Off Between January 1 and April 20 Citing data from the layoffs tracker, Layoffs.fyi, TechRadar reports that March 2026 was the worst month for tech employees, as companies across the globe laid off about 38,000 employees in a single month. The tracker also suggests that between January 1 and April 20, 98 tech firms have dismissed 92,272 employees. The list includes companies that are publicly listed on stock exchanges or have raised a significant amount of funding. While the 38,000 figure seems huge, a significant contribution came from Oracle, the Texas-based software giant, which laid off 30,000 employees in one go, as the firm has begun investing heavily into building its AI infrastructure. Last year, a report highlighted that the company is buying around 4,00,000 Nvidia GB200 chips worth $40 billion (about Rs. 3,79,164 crore) to lease computing power to OpenAI. Most recently, a report suggested that Mark Zuckerberg-led Meta is letting go of 200 employees, as the US-based tech giant further pushes into the AI era. The company reportedly also plans to gradually phase out the blue-collar middle manager roles to have leaner teams and a streamlined hierarchical structure. However, March also saw a few layoff announcements from tech firms, which were interestingly not related to AI. On March 24, Epic Games' Chief Executive Officer (CEO) Tim Sweeney announced that the Fortnite developer is laying off more than 1,000 workers. Sweeney further said that these layoffs at Epic Games were not "related to AI", while citing industry-wide challenges as the primary reason behind the dismissals.

Mark Zuckerberg Signals Leaner Future While Meta Doubles Down on A.I. Spending

Meta's job cuts highlight a broader tech trend as companies shrink workforces and invest billions into A.I. infrastructure and talent. Meta's upcoming 10 percent staff layoff is just the beginning. A reduced workforce could be the new normal as Mark Zuckerberg shifts spending toward A.I. rather than human employees. "We are seeing more and more examples where one or two people are building something in a week that would have previously taken dozens of people months," Zuckerberg told analysts during Meta's first-quarter earnings call yesterday (April 29). As the company pushes toward artificial general intelligence, or A.G.I., Meta will be "streamlining our teams so they are not bigger than they need to be," he added. Block-observer-newsletters observer-newsletters--in-content"> Sign Up For Our Daily Newsletter Sign Up Thank you for signing up! By clicking submit, you agree to our <a href="http://observermedia.com/terms">terms of service</a> and acknowledge we may use your information to send you emails, product samples, and promotions on this website and other properties. You can opt out anytime. See all of our newsletters Earlier this month, Meta warned employees of a May workforce reduction affecting about 10 percent of its roughly 78,000 staff. Chief Financial Officer Susan Li addressed the cuts on the earnings call, saying the downsizing "will allow us to move more quickly while also helping to offset the substantial investments we are making." Like much of Big Tech, Meta is ramping up A.I. spending. The company raised its projected 2026 capital expenditures to between $125 billion and $145 billion, up from a prior range of $115 billion to $135 billion. The increase comes as Meta beat Wall Street's first-quarter expectations, with revenue rising 33 percent year over year to $56.3 billion and net income jumping 61 percent to $26.7 billion. Still, shares fell about 9 percent today (April 30) after daily active people (DAP) growth fell short of analyst forecasts. Meta had 3.56 billion daily active users at the end of 2025, up 4 percent from the previous year. Meta's A.I. push includes building out its Meta Superintelligence Labs (MSL), staffed with researchers recruited through aggressive compensation packages. A surge in salaries contributed to a 35 percent year-over-year increase in quarterly expenses to $33.4 billion. "The growth in employee compensation was driven by technical hires we have added over the past year, particularly A.I. talent," said Li. Even as Meta trims headcount, executives say the company hasn't settled on what its future workforce should look like. "We do not really know what the optimal size will be in the future," said Li. "We will be continuously evaluating how we are structured to make sure we are best set up to deliver against our priorities over the coming years." A.I. is also reshaping Zuckerberg's own role. The CEO is reportedly developing an A.I.-powered avatar of himself to interact with employees in his absence, along with a "CEO agent" to handle routine executive tasks. Meta's cuts reflect a broader shift across the tech industry. In February, Block CEO Jack Dorsey slashed about 40 percent of his workforce -- roughly 4,000 employees -- citing an A.I.-first strategy and predicting similar moves across the sector by the end of 2026. Snap, led by Evan Spiegel, also laid off around 1,000 workers last month in anticipation of A.I.-driven efficiencies. Microsoft is moving in the same direction as it prepares to spend an estimated $190 billion on A.I.-related capital expenditures this year. Earlier this month, the company introduced its first voluntary buyout program for U.S. employees whose age and years of service total at least 70, about 7 percent of its 125,000-person workforce, or roughly 8,000 employees. The program is expected to add about $900 million in one-time costs this quarter, CFO Amy Hood said on Microsoft's earnings call yesterday. She signaled further reductions ahead. "We continue to evolve how we operate to increase our pace and agility," Hood told analysts. "Therefore, we expect headcount will decrease year-over-year." Georgia Fearn contributed reporting.

Mark Zuckerberg Says Meta Layoffs Are Being Driven By Soaring AI Spending, Warns More Job Cuts May Follow

Meta's AI Investment Reshapes Workforce Priorities During a company town hall, Zuckerberg said Meta's expanding AI infrastructure budget is forcing difficult financial trade-offs between funding advanced compute systems and maintaining headcount, Reuters reported. Zuckerberg explained that Meta's two primary expenses are infrastructure and personnel and increasing spending in one area means reducing available resources in another. As the company accelerates investments in AI, he said it needs to "take down" workforce size to balance those costs. Meta is expected to cut roughly 10% of its workforce beginning May 20, with additional layoffs reportedly coming later this year. More Layoffs Remain Possible While confirming the current round of cuts, Zuckerberg declined to provide long-term certainty about future staffing levels. The Meta CEO said he did not have a "crystal ball" for how the company's evolving AI transformation will unfold over the next several years. "I wish that I can tell you ⁠that I have a crystal ball plan for the next, like, three years of how all this stuff is going to play out. I don't. I don't think anyone does," he stated. Employee Backlash Grows Amid AI Push The layoffs, combined with Meta's broader shift toward an "AI native" structure and internal productivity tracking initiatives, have reportedly sparked internal criticism from employees. Zuckerberg insisted that AI efficiency tools alone are not currently driving layoffs. In a statement to Benzinga, Meta referred to Wednesday's earnings call, during which CFO Susan Li said the company does not yet know what its "optimal" long-term size will be, given the pace of AI advancements. "We do expect lower going forward employee compensation expense versus what we would have expected last quarter, given the planned workforce reduction, but that is offset within this year by restructuring costs that we expect to incur as part of the layoffs," Li added. Meta Beats Q1 Estimates, Raises AI Capital Spending Outlook Meta reported first-quarter revenue of $56.31 billion, surpassing Wall Street expectations of $55.45 billion, while adjusted earnings came in at $7.31 per share, ahead of analyst estimates of $6.78 per share. For the second quarter, Meta projected revenue between $58 billion and $61 billion, compared with consensus forecasts of $59.50 billion. The company maintained its full-year 2026 expense outlook of $162 billion to $169 billion but raised its capital expenditure forecast to between $125 billion and $145 billion, up from its previous guidance of $115 billion to $135 billion. Price Action: META shares closed Thursday at $611.91, down 8.55% and edged up 0.26% to $613.51 in after-hours trading, according to Benzinga Pro. According to Benzinga Edge Rankings, Meta ranks in the 88th percentile for Quality. It shows a negative price trend across its short, medium and long-term performance. Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Photo courtesy: Frederic Legrand - COMEO / Shutterstock.com Market News and Data brought to you by Benzinga APIs To add Benzinga News as your preferred source on Google, click here.