Microsoft and Meta announce large staff reductions as they spend big on AI

Source: The Guardian

Meta and Microsoft are trimming their workforces by thousands as they make heavy investments in AI and executives claim that the technology is meeting their companies’ productivity needs.

Meta told staff on Thursday that on 20 May it would cut some 10% of its personnel – just under 8,000 employees– to boost efficiency, part of a layoff plan made months ago. The company is also closing about 6,000 open roles. The same day, Microsoft announced to employees, for the first time, that it would offer voluntary retirement to about 7% of its American workforce of roughly 125,000.

In an internal memo to Meta’s staff, Janelle Gale, the chief people officer, didn’t mention AI explicitly but said the cuts would allow the company to “offset the other investments we’re making”. In Meta’s fourth-quarter 2025 earnings presentation, the CEO, Mark Zuckerberg spoke about a “major AI acceleration” that included plans to spend between $115bn and $135bn on AI – nearly twice the company’s capital expenditure the previous year.

“This is not an easy tradeoff,” Gale wrote. She emphasized that laid off employees would receive a generous severance package.

Read more: https://finance.yahoo.com/sectors/technology/articles/microsoft-meta-announce-sweeping-layoffs-212338173.html