Meta Raised Its AI Budget. The 8,000 Jobs Were Already in the Math.

At an April 30 town hall, Mark Zuckerberg gave Meta employees the reported trade. “We basically have two major cost centers in the company: compute infrastructure and people-oriented things,” he said, according to Reuters reporting cited by Fox Business. CNBC reported the plan as 8,000 jobs, roughly 10% of the 78,865 employees Meta reported as of Dec. 31, plus 6,000 unfilled roles.

Together, compute is protected and headcount is adjustable.

Compute gets the protection

Meta lifted its 2026 capital-spending guide to $125 billion to $145 billion, up from the prior $115 billion to $135 billion range, after a first quarter with $56.3 billion in revenue and $26.8 billion in net income, Variety reported. Net income included a one-time tax benefit. Li said the capex increase reflected “higher component pricing this year” and added future-capacity data center costs.

On the earnings call, Li said Meta had “continued to underestimate our compute needs even as we have been ramping capacity significantly” as AI advances kept producing new projects.

Zuckerberg told employees that getting staff to use AI tools more efficiently was “not the thing that’s driving layoffs.” He had also claimed AI coding tools lifted output per engineer 30% since early 2025, with power users seeing output gains of 80% year over year.

Payroll becomes the variable

Meta does not “really know what the optimal size of the company will be in the future,” Li told analysts. CNBC reported that more cuts could come in August and later in the fall.

In late 2022, Zuckerberg announced 11,000 cuts that later expanded to 21,000 and told workers, “I got this wrong, and I take responsibility for that.” This time, Meta’s memo said the reductions would help the company run more efficiently and “offset the other investments” it is making.

WIRED reported that the official HR advice before the May 20 notices was to “make sure your personal email” was current internally, then wait.

The model is inside the office

WIRED described record profits and record-low morale. One Instagram employee said, “Everyone is unhappy; the only people who are not unhappy are, literally, executives.” A policy staffer put the AI link this way. “The vibe is a bit ‘over it’, lack of connection to the mission, upcoming layoffs, American employees being used to train the AI models that will replace them.”

Meta’s Model Capability Initiative collects typing and clicking behavior on U.S. employees’ work computers, with some reports describing screen data concerns, so Meta can train agents to perform computer tasks. Meta spokesperson Tracy Clayton told WIRED, “There are safeguards in place to protect sensitive content, and the data is not used for any other purpose.”

Employees posted petition flyers in cafeterias and bathrooms. “Selfishly, I don’t want my screen scraped because it feels like an invasion of my privacy,” one engineer wrote internally, according to Futurism’s summary of WIRED reporting. “But zooming out, I don’t want to live in a world where humans, employees or otherwise, are exploited for their training data.”

Meta's median total compensation last year was $388,200, down from $417,400 in 2024. Separately, WIRED reported that Meta offered packages as high as $100 million a year to several top AI researchers in recent months. The pay split signals which roles Meta is trying hardest to retain.

Wall Street wants proof

“Now the world understands that jobs are being replaced by machines, and if you’re not doing that, shareholders are getting upset,” Umesh Ramakrishnan of Kingsley Gate told CNBC.

CNBC examined 23 S&P 500 companies that explicitly cited AI or hinted at increased AI use when cutting jobs. Thirteen of them, or 56%, traded lower after the announcements; among the decliners, the average drop was about 25%. Meta itself was down about 7% this year and almost 5% over the prior 12 months, CNBC reported on May 18.

Cisco offered a contrasting case. The company reported record revenue of $15.8 billion in its most recent quarter, paired with fewer than 4,000 layoffs, and told investors that AI infrastructure orders were expected to reach $9 billion, up from $5 billion. CFO Mark Patterson told analysts, "This was really not a savings-driven restructure."

Alphabet raised its 2026 capex guidance to $180 billion to $190 billion, above Meta's $125 billion to $145 billion range. Alphabet also reported Google Cloud revenue growth of 63% in its most recent quarter and a backlog that nearly doubled. Meta's growth case rests on advertising, its apps, and Zuckerberg's stated goal of bringing personal superintelligence to billions of users.

Daniel Keum of Columbia Business School told CNBC that productivity gains from AI may not flow to any single firm. "If everybody's sort of improving, then the baseline is just shifting and no one is more profitable," Keum said.

Zuckerberg's earlier "year of efficiency," announced in early 2023 after pandemic-era overhiring, was presented as a one-time correction. The April 30 town-hall framing describes the current reductions as part of an ongoing capital-allocation rule that links compute spending and headcount in the same budget.

The May 20 notices are expected to confirm the other half, about 8,000 planned cuts and 6,000 roles Meta no longer plans to fill.

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Marcus Schuler

San Francisco

Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: [email protected]