Meta is undergoing one of its most dramatic restructurings yet, cutting roughly 8,000 jobs while reassigning 7,000 employees to AI-focused roles as CEO Mark Zuckerberg doubles down on artificial intelligence. The company is investing $135 billion in 2026, double its 2025 spending, to build data centers and hire top AI researchers. This represents a sharp pivot away from the metaverse ambitions that dominated Meta's strategy for years.

Why Is Meta Making Such Drastic Cuts?

Two years after the metaverse failed to gain traction, Zuckerberg declared that artificial intelligence was the future of Meta's business. In October 2024, he expressed confidence that Meta's AI division could "accelerate our core business" and deliver "strong ROI over the next few years." The company has already slashed jobs tied to metaverse ambitions, but this week's restructuring signals an even more aggressive shift.

Zuckerberg

The timing reflects intense competition in the AI space. OpenAI, Anthropic, and other startups have captured significant mindshare and investment, while Meta's own large language model, Llama, debuted to mixed reviews and reports of bugs last year. The company hired Alexandr Wang as its first-ever chief AI officer in August to fix Meta's AI tools and accelerate development. According to industry benchmarks, Meta's newer tool, Muse Spark, still ranks behind products from OpenAI, Anthropic, and X.

What Exactly Is Happening to Meta's Workforce?

On Wednesday, around 8,000 employees received layoff notices at 4 a.m. local time, with an additional 6,000 open roles being eliminated. Meta asked all staff to work from home during what some internally call "Decimation Day," affecting close to one in ten employees. Beyond the layoffs, 7,000 staffers are being "drafted" into AI-focused roles, reassigned to engineering teams using "AI native design structures" and to a department called Central Analytics, which measures productivity.

The restructuring has created significant anxiety among remaining employees. An Instagram staffer told Wired that "everyone is unhappy," while a longtime Meta employee described crying in the shower and feeling "as anxious and stressed as I have ever been at a job." One source of particular frustration is Meta's use of mouse-tracking software on employees to train its AI, which more than 1,000 staffers have signed a petition condemning.

How Meta Plans to Compete in the AI Race

• Massive Capital Investment: Meta is spending up to $135 billion in 2026 on data centers and hiring top AI researchers, double the company's 2025 budget, to catch up with competitors like OpenAI and Anthropic.
• Leadership Changes: The company hired Alexandr Wang as its first chief AI officer in August 2025 to lead efforts to fix Meta's AI tools and accelerate product development across the organization.
• Product Development: Meta debuted Muse Spark in April 2026, though it currently ranks behind competing products from OpenAI, Anthropic, and X on industry benchmarks, indicating room for improvement.

Despite the turmoil, Meta continues to generate substantial profits. The company reported nearly $27 billion in profits in the first quarter of 2026, providing the financial cushion to fund its ambitious AI spending plans. However, the restructuring reflects a broader trend in tech: more than 100,000 jobs were cut across the industry in the past year due to AI concerns or efficiency measures, which some analysts suggest may also correct past overhiring.

The company's hardware ambitions remain intact alongside its AI push. Zuckerberg recently teased new smart glasses ahead of Meta Connect 2026, scheduled for September 23 and 24 at the company's Menlo Park campus. The event is expected to showcase Meta's latest AI advancements, including improved chatbots, AI-powered creation tools for Horizon Worlds, and enhanced computer vision for smart glasses, alongside potential announcements about next-generation VR hardware.

For Meta employees, the coming months will be critical. The company's ability to deliver breakthrough AI products will determine whether the massive investment and workforce upheaval were justified. Until then, uncertainty and anxiety are likely to persist across the organization, even as executives remain confident in the company's AI-first future.