"We basically have two major cost centres in the company: compute infrastructure and people-oriented things. 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."
"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 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."
Meta's CEO Mark Zuckerberg announced that the company's layoffs are a direct result of rising capital expenditures on AI infrastructure. He stated that the company has two major cost centers: compute infrastructure and people-oriented expenses. As Meta invests more in AI, it necessitates a reduction in workforce size. The chief people officer did not rule out further layoffs, and the CFO mentioned uncertainty regarding the optimal long-term workforce size due to rapid AI advancements. Meta's capex guidance for 2026 has increased significantly, impacting stock prices.
Read at TNW | Meta
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