Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) plans to lay off approximately 10% of its workforce, affecting about 8,000 employees, according to a company memo sent on Thursday.
The layoffs are scheduled to begin on May 20.
In a note following the report, analysts at Wedbush described the move as the “right move in our view,” saying the cuts are aimed at improving efficiency while supporting increased spending on artificial intelligence initiatives.
The analysts wrote that the layoffs are part of a broader effort to restructure operations around AI, with Meta seeking to rely more heavily on automation.
“We believe that this is part of Meta’s strategy to increasing leverage AI tools to automate tasks that once required large teams,” they wrote, adding that this shift could enable a leaner operating structure.
Wedbush also indicated that further workforce reductions may be possible, noting that additional layoffs could occur later this year as the company continues its restructuring and expands internal use of AI to boost productivity.
While acknowledging investor concerns about rising investment levels, the analysts said they view the current strategy as more measured.
"We believe the company is taking a more intentional approach, and this cycle is more disciplined than Meta's investment thesis four years ago,” they wrote.
They added that they are encouraged by management’s cost-cutting efforts and said they are confident in leadership’s ability to manage the transition.
Wedbush views the developments “positively relative to current expectations,” as Meta works to align spending with long-term growth and margin objectives.
Ahead of Meta’s first quarter earnings report next Wednesday, Wedbush expects Meta to emphasize a more disciplined and structured approach to its rising capital expenditures.
Rather than framing spending around speculative AI ambitions, the company is likely to highlight investments that are prioritized based on clear returns and tied directly to monetization opportunities. Wedbush views this shift positively, noting Meta’s continued reallocation of resources and a more measured strategy as it builds out next-generation consumer products and services.
The firm also believes Meta’s projected $115 billion to $135 billion in 2026 capex is necessary to support AI and infrastructure expansion, with these investments already contributing meaningful gains in its core advertising business.
Shares of Meta were set to open almost 3% higher on Friday at about $662.