Meta will cut 10% of its workforce to improve efficiency and offset its enormous AI spending, according to a new report from Bloomberg. The news comes on the same day that Microsoft announced it would be offering buyouts to 7% of its workforce, the first time in the company’s 51-year history.
The layoffs at Meta will impact about 8,000 employees, according to a memo sent to employees, and roughly 6,000 vacant positions won’t be filled, reports Bloomberg. Employees who are on the chopping block will be notified on May 20, according to the Wall Street Journal.
Meta’s Chief People Officer Janelle Gale wrote in the memo that, “This is not an easy tradeoff and it will mean letting go of people who have made meaningful contributions to Meta during their time here,” according to the Journal. Meta declined to comment in an email to Gizmodo, but confirmed the number of people being laid off was accurate.
Microsoft sent its own memo to employees on Thursday announcing a one-time retirement program for employees whose age and years at the company add up to at least 70. Employees will get details about that program on May 7, according to CNBC.
The layoffs and buyouts are part of a broader push in the tech world to reduce headcount in the name of AI. Part of that equation is the perception that companies need fewer workers because AI is improving efficiency. But another reason involves the incredible amount of spending these companies are doing to build out AI infrastructure. Those billions are being offset by reductions in funds that would’ve previously been given to employees for their labor.
Large companies like Amazon are making a similar calculation while also going the extra mile to suppress wages among its white-collar workforce. Reuters reports that Amazon is stripping titles from many of its workers in the Ring and Blink home security units. As of next month, many employees will simply be called “builders,” with bosses known as “builder leads.”
This change is being positioned as a way to flatten hierarchies and “reduce corporate bureaucracy.” But the reality of what’s driving this is pretty obvious to anyone who’s paying attention. Stripping job titles, including something like “senior project manager,” allows companies to pay people less.
Blue-collar workers saw a massive upheaval in their work and wages during the second half of the 20th century thanks to automation. But white-collar work didn’t always see the same kind of disruptions from tech in the early 21st century. You had jobs that largely disappeared thanks to the internet, like a travel agent. But white-collar workers were often insulated from disruptions until generative AI came along. But now companies believe they can offer lower salaries to office workers because their competition isn’t just other humans. It’s the chatbot that can work faster, even if the work arguably isn’t as good.
Today, companies like Meta and Amazon can spend billions of dollars building out AI data centers and spending big on the tools that will replace their workforce. And it’s giving companies the leverage they may have previously lacked during times of economic prosperity. Historically, low employment meant that employers had to pay higher salaries to attract talent in a smaller pool of workers. The rising wages allowed those workers to buy more things, feeding economic growth in the U.S. And the broader economy did better when middle-class white-collar workers were doing better. But that seems to have decoupled in a very strange way during recent years.
Wage growth has been slowing since 2022, and inflation is ticking up, with much more drastic inflation expected in the second half of 2026 if the Strait of Hormuz remains closed. But the ownership class and stock market seem to be doing just fine… at least for now. The Nasdaq and S&P 500 closed at record highs on Wednesday. And it doesn’t seem to matter that we’re reading about new layoffs at major employers of white-collar workers every week.
What’s the solution? To guys like Mark Zuckerberg, Jeff Bezos, and Elon Musk, AI will fix everything. In fact, Musk insists that everyone will be rich in the future, thanks to the AI-powered robots he’s going to deliver.
“Actually, AI/Robotics will mean everyone can have a penthouse if they want,” Musk tweeted on April 18. “The output of goods & services will be several orders of magnitude higher than today’s economy.”
The billionaire oligarch is selling the idea of a leisure society where everyone is not only financially secure but also wealthy. It was a common idea in the 20th century, even among level-headed experts. But it didn’t pan out, because companies don’t respond to advances in automation by making their employees wealthy and telling them they only have to work three hours a day. They respond by laying off workers and keeping the money for themselves.
That’s how capitalism works, and the wealthiest people in the world—Zuck, Bezos, Musk—obviously understand this. If they thought otherwise, they’d be handing their employees enormous checks. Instead, they’re handing them pink slips.
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