Another wave of technology sector job cuts may be on the horizon — and this time the spotlight is on Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB).
Reports over the weekend suggest the social media giant is preparing a sweeping round of layoffs as it ramps up spending on artificial intelligence infrastructure and talent. The potential cuts — affecting as much as 20% of the workforce, according to Reuters, which first reported the story on Saturday — would mark one of the largest restructuring moves in the company’s history and underline how aggressively big tech firms are reshaping their cost bases to fund the next phase of the AI arms race.
Investors were already unsettled by the broader shift. Shares in Meta Platforms closed about 3.8% lower on Friday at roughly US$613.71, leaving the stock down more than 21% over the past six months as markets weigh the escalating cost of building large-scale AI platforms — and fresh doubts about execution after reports the company has delayed the launch of its next major AI model, codenamed Avocado. The model was expected earlier this year but has reportedly been pushed back to at least May after underperforming rival systems in internal tests.
Meta has not formally confirmed the scale of the cuts, but the broader trend is already familiar across the tech sector: companies are trimming headcount in legacy business units while redirecting billions of dollars into AI models, data centres and specialised engineering teams.
The AI spending squeeze
Meta has been pouring capital into AI as it seeks to compete with rivals developing increasingly powerful large language models and generative tools. Chief executive Mark Zuckerberg has repeatedly framed AI as the company’s central strategic priority — from content recommendation engines across Facebook and Instagram to the development of advanced AI assistants and open-source models.
That pivot is expensive.
Training frontier AI systems requires vast computing resources, specialised chips and enormous datasets. Building the data centre infrastructure needed to support those systems is now one of the largest capital expenses facing big tech companies.
As a result, firms are increasingly reallocating spending internally — and labour costs are often the fastest lever to pull.
The trend has become increasingly visible recently. Payment platform Block Inc (NYSE:SQ)cut hundreds of jobs earlier this month as it reshaped teams around AI-driven automation. Australian-founded collaboration software group Atlassian (NASDAQ:TEAM) recently announced plans to cut about 1,600 roles while accelerating its own AI strategy.
Both moves followed a similar logic: reduce operational costs tied to traditional software development or administrative functions, and redeploy capital towards machine-learning capabilities and AI-powered products.
Meta’s reported layoffs suggest the same recalibration is now reaching another major technology heavyweight.
Job losses spreading beyond Silicon Valley
While many of the most visible layoffs have occurred in the United States, the ripple effects are increasingly visible in Australia and other global tech hubs.
Australian companies with strong ties to Silicon Valley capital markets — including software firms and fintech groups — are under growing pressure to demonstrate AI strategies to investors. That has often meant restructuring teams, reducing headcount in non-core roles or shifting hiring towards machine learning engineers and data scientists.
The shift reflects a broader repricing under way across the technology sector.
Over the past year, markets have rewarded companies that can convincingly position themselves within the AI ecosystem, while punishing those perceived to be lagging. Even companies benefiting from the AI boom face investor scrutiny if spending levels appear too high or the payoff remains uncertain.
Meta’s recent share price slide illustrates that tension. Despite being one of the most profitable advertising platforms in the world, the company is now spending heavily to ensure it remains competitive in a rapidly evolving AI landscape.
A structural shift in tech employment
The result is a paradox that has become increasingly visible across the industry.
Artificial intelligence is creating new high-value roles — particularly in machine learning research, chip design and advanced software engineering — but it is also accelerating the elimination of other positions through automation and cost restructuring. In many cases, companies are not simply shrinking their workforces. They are reshaping them.
As the AI race intensifies, tech giants are betting that massive investment today will secure their place in the next generation of digital platforms. The cost of that bet is becoming increasingly visible — not just in soaring infrastructure spending, but in the shape of the tech workforce itself.
