Tech giants Meta and Microsoft have announced plans to cut thousands of jobs, signalling a significant strategic pivot towards heavy investment in artificial intelligence across the industry.
Meta's workforce reduction
Facebook and Instagram's parent company, Meta, confirmed it intends to reduce its workforce by approximately 8,000 roles, representing 10 per cent of its total staff. This move, outlined in an internal memo, aims to enhance efficiency and free up resources for strategic new investments within the business.
Beyond the direct redundancies, Meta also intends to leave around 6,000 existing job vacancies unfilled. These significant cuts come amidst the company's substantial capital expenditure plans, as it strives to maintain its competitive edge against rivals in the rapidly evolving field of AI technology.
Chief executive and founder Mark Zuckerberg is leading aggressive spending on talent and technology infrastructure to support new AI products, including chatbots and large language models.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Reports of further headcount reductions at Meta come as little surprise and, while unfortunate for all involved, should be taken as a broadly positive signal. With heavy investment in top AI talent, trimming elsewhere points to a sharper focus on the individuals driving the next leg of growth.”
Microsoft's voluntary redundancy programme
Meanwhile, Microsoft has taken a different approach to cut its workforce, launching a major voluntary redundancy programme. Microsoft plans to make the offers in early May to about 8,750 people, or 7% of its US workforce.
Both firms will brief investors with trading updates next week.
