Meta Accelerates AI Spending While Planning Major Layoffs, Sources Say

Meta’s internal budgeting documents, obtained by ChosunBiz, show the company earmarking “several billion dollars” for a new wave of artificial‑intelligence research aimed at building artificial general intelligence (AGI). The plan, drafted in early 2024, earmarks a sizable portion of the spend for large‑scale model training and a dedicated “AI‑first” product team that will sit alongside its existing Reality Labs effort. According to the same report, the AI push is being funded even as Meta’s leadership prepares a “significant workforce reduction” that could affect “thousands of employees” across its engineering, product, and sales divisions.

The layoff strategy appears to be a direct response to the company’s recent earnings shortfall. CNBC cited an internal memo that flagged a “persistent revenue gap” in the ad business, prompting executives to “tighten the cost base while doubling down on high‑growth AI initiatives.” TechCrunch reported that the cuts will be rolled out in multiple phases, starting with a “first wave” of redundancies announced last month and followed by a “second, larger wave” slated for the summer. The source added that the upcoming round will target roles deemed “non‑core” to the AI agenda, including many legacy infrastructure and content‑moderation positions.

Meta’s AI budget is not limited to research labs. MSN reported that the company is allocating funds to “acquire compute capacity, secure data pipelines, and expand partnerships with chip makers” to accelerate its AGI roadmap. Techlusive noted that Meta has already begun hiring “AI‑focused talent” from rivals such as Google and OpenAI, a move that underscores the firm’s intent to compete for top‑tier researchers. The same outlet highlighted that Meta’s AI spend is expected to outpace its traditional product development costs by the end of 2025, a shift that could reshape the firm’s cost structure for years to come.

Industry observers see the juxtaposition of layoffs and AI investment as a classic “re‑allocation” play. TechCrunch quoted an unnamed insider who said Meta is “trading headcount for horsepower,” a sentiment echoed by the ChosunBiz piece, which described the plan as “a strategic pivot to prioritize AI over legacy ad‑tech engineering.” The insider added that the company expects the AI initiatives to generate “new revenue streams” through generative‑content tools, augmented reality experiences, and potential licensing of its proprietary models. If the AI bets pay off, Meta hopes to offset the short‑term pain of workforce cuts with a longer‑term growth engine that rivals the likes of OpenAI and Google DeepMind.

The human impact of the restructuring is already being felt. TechCrunch reported that affected employees received “short‑notice termination letters” and were offered “outplacement services and severance packages” in line with previous Meta layoff rounds. CNBC noted that morale in the remaining workforce has dipped, with internal surveys showing “increased anxiety about job security” among engineers not directly tied to AI projects. Nevertheless, senior executives remain upbeat, insisting that the AI spend will “position Meta at the forefront of the next computing paradigm,” a line that mirrors the messaging in the internal AI roadmap disclosed by ChosunBiz.