Meta and Microsoft have announced major workforce reductions as both companies dramatically increase spending on artificial intelligence projects. The moves highlight how AI is reshaping priorities across the tech industry.
Meta said it will cut 10% of its workforce, affecting nearly 8,000 employees, while also closing around 6,000 open job positions. The layoffs are expected to begin on May 20 as the company redirects resources toward AI development.
Microsoft, meanwhile, said it will offer voluntary retirement packages to about 7% of its U.S. workforce. Thousands of long-serving employees could qualify under the program as the company restructures around automation and AI growth.
Meta CEO Mark Zuckerberg has openly said AI tools are reducing the need for large teams. He noted that projects once requiring many workers can now be completed by one highly skilled person using AI systems.
Both companies are investing enormous sums into the technology race. Meta plans to spend up to $135 billion on AI this year, while Microsoft is expected to invest between $110 billion and $120 billion, largely on AI infrastructure and data centers.
Executives say AI is boosting productivity internally. Microsoft CEO Satya Nadella previously claimed AI already handles around 30% of the company’s coding work, while Zuckerberg predicted AI could soon do half of Meta’s software development.
The announcements have intensified fears across the tech sector that AI could replace thousands of white-collar jobs. With other firms like Amazon, Oracle and Block also reducing staff, many workers now see 2026 as a turning point for employment in the industry.
Sources: The Guardian, BBC, Reuters, CNBC
