Meta will cut 10% of workforce as it pushes more into AI

The social media giant will initiate the job cuts on May 20, and is scrapping plans to hire people for 6,000 open roles, according to a Thursday memo to employees that Bloomberg News first reported on.

Meta’s latest planned round of layoffs follow several smaller job reductions that the company has characterized as necessary to improve efficiency while focusing its efforts on generative AI where it faces tough competition from rivals like OpenAI, Google and Anthropic.

The tech giant fired roughly 10% of staff who focus on metaverse-related virtual reality projects stemming from its Reality Labs unit, CNBC reported in January. Roughly 1,000 people in the company’s Reality Labs unit were let go at that time, and affected staff working on the company’s Quest-branded VR headsets, VR content studios and the Horizon Worlds virtual social network. 

Another round of layoffs commenced in March and affected hundreds of employees working in a variety of units, including Facebook, Reality Labs, global operations and sales. Meta also said that month that it would shift away from third-party vendors and contractors, which have historically handled content moderation tasks, in favor of relying on various AI technologies.

Earlier this week, Meta revealed to staff that a new employee tracking tool called the Model Capability Initiative (MCI), intended to capture data from staff members using their work computers. The data, which includes employee keystrokes and mouse clicks, is needed to train AI agents, a Meta spokesperson said in a statement.

“If we’re building agents to help people complete everyday tasks using computers, our models need real examples of how people actually use them — things like mouse movements, clicking buttons, and navigating dropdown menus,” the spokesperson said. “To help, we’re launching an internal tool that will capture these kinds of inputs on certain applications to help us train our models. There are safeguards in place to protect sensitive content, and the data is not used for any other purpose.”

Meta will report first-quarter earnings next Wednesday on April 29.

Meta shares are down about 2.4% in midday trading to $658.40.

This is breaking news.

WATCH: Despite the energy shock, AI arms race set to keep capex spending elevated.