'This is the best path forward...': Meta to cut 8,000 jobs from May 20 as AI push ramps up

Tech giants Meta and Microsoft are reported to be looking to massively cutdown their workforce, as a result of investing heavily on artificial intelligence (AI).

According to Reuters, the first wave of downsizing is likely to be conducted on May 20, with more rounds expected to take place later in the year.

The Facebook and ⁠Instagram owner will lay off about 10% of its global workforce, or ‌close to 8,000 employees, in that initial ​round, one of the sources told Reuters.

The company is planning further layoffs in the second half of the year, although details of those cuts, including date and size, have not yet been confirmed.

Executives may adjust their plans as they observe developments in artificial intelligence capabilities. There are also reports that the company was planning ⁠to lay off 20% or more of its global workforce.

CEO Mark Zuckerberg is pumping hundreds of billions of dollars into AI as he seeks to dramatically reshape his company’s inner workings around the technology, reflecting a ⁠broader pattern among major ‌U.S. companies this year, particularly in the tech sector. Amazon.com similarly has trimmed 30,000 corporate employees in recent months, representing nearly 10% of its white-collar workers, while in February ‌the fintech company Block chopped nearly half of its staff.

In both of those cases, executives tied the cuts to efficiency gains from ⁠artificial intelligence.

Layoffs.fyi, a website tracking tech job cuts around the world, reported that 73,212 employees have lost their jobs so far this year. For all ‌of 2024, the figure was 153,000. Meta's layoffs this year will be the ‌social media giant's most significant since a restructuring in late 2022 and early 2023 that ‌it dubbed the "year of efficiency," when it eliminated about 21,000 jobs. At that time, Meta's ‌stock was in freefall and the company was struggling to correct for COVID-era growth assumptions that ultimately proved unsustainable.

According to a Bloomberg report, the employees of Meta have been informed about the layoff via an internal memo sent by Meta’s chief people officer, Janelle Gale.

"Over the last few weeks we have been working on some changes to our organization that will result in us laying off around 10% of the company on May 20, and closing about 6,000 open roles. Normally, we would want to nail down more details before communicating about this broadly, but since this has leaked, I want to share what I can right now. I know this is unwelcome news and confirming this puts everyone in an uneasy state, but we feel this is the best path forward, given the circumstances," the memo first accessed by Bloomberg said.

On the other hand, CNBC reported that Microsoft is planning its first voluntary employee buyout in the Windows maker's 51-year history.

Like other US ⁠tech giants, Microsoft has been spending aggressively on artificial intelligence. But adoption ⁠of one of its flagship AI services, the ‌365 Copilot, has reached ​just slightly over 3% of its total 450 million 365 customers.

The one-time retirement program will be open to U.S. workers at the senior director level and below, with a combined age and years of ​employment of 70 or ⁠more, CNBC reported.

"Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support," Amy Coleman, Microsoft's executive ⁠vice president and ‌chief people officer, wrote in the memo viewed by CNBC. 

With inputs from Reuters