Microsoft and Meta are trimming thousands of roles as both companies double down on massive investments in Artificial Intelligence and executives say the technology is shaping the companies’ productivity needs to get jobs done.
Meta informed staff recently that it will cut about 10% of its workforce which is just under 8,000 employees, with the layoffs set for 20 May. The company is also shutting down around 6,000 open positions. The same day, Microsoft revealed it would offer voluntary retirement packages to about 7% of its US workforce, which stands at roughly 125,000 employees.
Earlier, during Meta’s fourth-quarter 2025 earnings presentation, CEO Mark Zuckerberg spoke of a “major AI acceleration,” outlining plans to spend between $115bn and $135bn on AI which is nearly double the previous year’s capital expenditure.
Zuckerberg, however, has been more direct about the role AI is playing in reshaping hiring decisions. He said during the January earnings call, “We’re starting to see projects that used to require big teams now be accomplished by a single very talented person.”
In an internal memo, Meta’s chief people officer, Janelle Gale, avoided directly referencing AI but noted that the cuts would help the company “offset the other investments we’re making.” Gale wrote, “This is not an easy tradeoff,” adding that affected employees who had been laid-off would receive generous severance packages.
Microsoft told staff that it would introduce voluntary buyouts for long-serving employees, particularly those whose combined age and years of service reach 70 or more, according to reports. More than 8,000 workers are said to qualify.
The tech giant had already projected spending around $100bn on AI infrastructure for the coming fiscal year, a figure analysts now believe could climb as high as $120bn.
In February, Microsoft’s AI chief, Mustafa Suleyman, said he believes AI could replace most white-collar jobs within the next 12 to 18 months.
CEO Satya Nadella has repeatedly highlighted how AI is transforming operations within the company. In April 2025, he revealed that AI was already responsible for as much as 30% of Microsoft’s coding work.
In a January press release, Nadella said “We are only at the beginning phases of AI diffusion, and already Microsoft has built an AI business that is larger than some of our biggest franchises.”
Zuckerberg, who shared a stage with Nadella at the time, echoed similar expectations. When asked how much of Meta’s coding was being handled by AI, he replied: “Our bet is sort of that in the next year probably … maybe half the development is going to be done by AI, as opposed to people, and then that will just kind of increase from there.”
The job cuts have heightened anxiety across the tech industry, where workers increasingly fear being replaced by the very technology their companies are building. Those concerns appear to have some basis. A recent Reuters report revealed that Meta has introduced software on employees’ computers to track mouse movements, clicks and keystrokes data that could be used to train AI systems.
Several major tech companies investing heavily in AI have also reduced their workforce. Jack Dorsey recently cut nearly half of Block’s staff, citing gains driven by AI. Amazon, which announced plans to spend $200bn in a single year, has laid off at least 30,000 employees over the past six months. Meanwhile, Oracle has also moved to cut thousands of jobs as it grapples with the financial strain of its large-scale investment in data centres.
As the race to dominate AI intensifies, the human cost is becoming harder to ignore with thousands of workers now caught in the middle of a rapidly evolving tech landscape.
