Shares of Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) were up around 2.4% on Monday amid reports that the social media and technology giant is considering layoffs that could affect as much as one-fifth of its workforce.
The potential job cuts are aimed at offsetting rising costs from the company’s artificial intelligence infrastructure and preparing for efficiencies from AI-assisted operations, according to three sources familiar with the matter who spoke to Reuters. The timing and exact scale of the reductions have not been finalized.
Top executives at Meta have reportedly shared the proposed plans with senior leadership, marking what could become the company’s largest workforce restructuring since late 2022 and early 2023. At that time, Meta cut roughly 11,000 jobs in November 2022, representing about 13% of its workforce, and followed with an additional 10,000 layoffs months later.
Jefferies analysts noted that a 20% reduction in headcount “would reinforce that AI is beginning to deliver real productivity gains at scale, while helping offset a significant AI capital expenditure ramp.” The firm added that the move could improve margins not just at Meta, but potentially across the tech and software sectors as investors reassess the relationship between headcount, growth, and profitability.
Jefferies estimates that every $1 billion in expense reduction could add roughly $0.40 to Meta’s fiscal 2026 earnings per share, reaffirming the stock as their top pick.