Meta (META) CEO Mark Zuckerberg continues to deliver what Wall Street expects: strategic layoffs and massive investments in computing power. This familiar pattern has returned as Meta doubles down on its artificial intelligence ambitions.
Meta’s stock jumped by as much as 3% on Monday after the social media giant announced a cloud-computing deal with Nebius (NBIS), potentially worth up to $27 billion. At the same time, Reuters reported that Meta is reportedly considering its largest round of layoffs in years, possibly cutting 20% of its workforce.
This “one-two punch” – reducing staff while investing heavily in AI infrastructure – is a strategy many American companies are exploring or already using. It involves spending big on future tech but also finding ways to save money elsewhere. This approach signals both financial responsibility and a drive for efficiency.
While some investors remain unsure if the industry’s huge AI build-out will pay off, shareholders have repeatedly given Zuckerberg the benefit of the doubt. This trust largely stems from Meta’s robust advertising business, which consistently generates profits. This financial strength allows him to take significant risks. The ongoing success of the ad business also supports his view that AI is already boosting the company.
In 2023, Meta’s “year of efficiency” involved eliminating thousands of jobs, a move that Wall Street applauded and investors supported. As Zuckerberg wrote back then, “Profitability enables innovation.”
These two strategies – cost-cutting and AI investment – are once again working together. This time, the expensive expansion into AI might also be balanced by the productivity gains AI itself offers to the employees who remain.
Although Meta did not confirm Reuters’ report that the layoffs are part of preparing for a workforce more heavily assisted by AI, such a model would represent a new level of efficiency. It would build upon the streamlined version of the company that took shape in 2023.
If AI advancements truly allow businesses to operate with fewer or even no employees, then the combined strategy of shrinking the workforce while pushing AI seems almost unavoidable for companies like Meta.
