Meta Lays Off 700 Workers in Aggressive Pivot from Metaverse to AI

Meta is officially closing the book on its metaverse dreams, but the aggressive pivot to an AI-driven future is carrying a heavy human cost. In a sudden restructuring effort, the tech giant has laid off roughly 700 workers across crucial departments, choosing instead to funnel its resources into the expensive artificial intelligence arms race. The cuts hit hard across core social media operations, recruiting, sales, and the company's embattled Reality Labs division, which handles virtual reality headsets and smart glasses. 

According to reports from The Information and sources speaking to The Register, affected staff were abruptly told to work from home just before the axe fell. Addressing the shakeup, a Meta spokesperson stated that teams across the company regularly restructure or implement changes to ensure they are in the best position to achieve their goals, adding that they are trying to find other opportunities for impacted employees where possible.

The driving force behind this sudden squeeze is the staggering price tag attached to building an automated future. Training next-generation AI agents requires building physical data centers, securing custom silicon chips, and fighting for specialized talent. To fuel this, Meta is forecasting total expenses to reach between $162 billion USD and $169B for 2026. CEO Mark Zuckerberg has been upfront about the strategy, recently stating that AI tools will soon allow much smaller teams to deliver the kind of work that previously required significantly larger groups.

Jaw-Dropping Executive Stock Options

For the folks suddenly out of a job, the timing of the transition is an incredibly bitter pill to swallow. Just hours before the layoffs made headlines, Meta unveiled a jaw-dropping stock options plan aimed at retaining top leadership. Several high-ranking executives could each see stock awards worth up to $921M over the next five years, provided Meta can hit a highly ambitious $9T market valuation by 2031. 

This stark contrast between skyrocketing executive wealth and a shrinking everyday workforce has reportedly wrecked internal morale. Everyday roles are essentially being sacrificed to balance the books, especially after former passion projects like Reality Labs, which have bled over $80B since inception and suffered a previous cut of 1,000 jobs just this past January.

The Delay of Meta’s "Avocado" AI Model

Despite the ruthless financial pivot and massive investments—including last year's $14.3B injection into Scale AI and the acquisitions of startups like Moltbook and Manus AI—Meta’s technological journey hasn't been flawless. The company's upcoming AI model, code-named Avocado, recently failed internal performance benchmarks and has been quietly delayed. 

Investors are cheering the efficiency drive, sending Meta's shares climbing as the company offsets its massive AI costs with payroll reductions. Unfortunately for Meta's rank-and-file, the anxiety is far from over. These 700 job losses might just be the opening move in a much larger shakeup. 

Earlier reports indicated Meta was weighing plans to cut up to 20% of its workforce to fund AI infrastructure. These recent layoffs may signal the start of broader reductions, potentially affecting more roles globally amid the company's aggressive push for AI supremacy.