Mark Zuckerberg says AI spending and war drove Meta layoffs

“We [basically] have two cost centers in the company,” Zuckerberg said, according to the Journal, pointing to raw processing power, like GPUs and chips, as well as data centers. “There’s [compute and infrastructure] and there’s people-oriented things, and if we’re investing more in one area to serve our community, then that means that we have less capital to basically allocate to the other.” “So that means that we do need to take down the size of the company somewhat.” During the meeting, Zuckerberg also touched on downsizing teams in the future. “If a team used to take 50 or 100 people and now it takes 10, having 50 or 100 people on that team can actually be counterproductive going forward—so I think we need to fix that,” Zuckerberg said. Between the layoffs, employee morale at Meta seems to have faltered in recent months. According to data from Blind reviewed by Fast Company, posts on the anonymous workplace platform containing negative sentiment about Meta have quadrupled since 2024. In response to Fast Company, Meta referred to the company’s Thursday earnings call, during which Meta CFO Susan Li said that Meta is “very focused on leveraging AI tools” to boost productivity, and still navigating the company’s future “optimal size.” Li added that because of the layoffs, Meta expects lower employee compensation costs compared to last quarter. “But that is offset within this year by restructuring costs that we expect to incur as part of the layoffs,” she added. Looking ahead, Zuckerberg said Meta’s focus will shift to building more new apps. “Historically, we’ve built like four or five big apps,” he said in the meeting. “We want to build a lot more apps, so there’s a bunch of stuff that we’re trying to figure out, and some of this we just need to figure out over time.” Business Insider reported that Meta’s chief people officer Janelle Gale was asked about further layoffs in the meeting—which likely did little to assuage anxious employees. “Will there be more layoffs? The question always comes up. I’d love to say that there are no more layoffs, but I can’t say something we can’t deliver,” Gale said, according to Business Insider. “While the business is strong, priorities change, competition is fierce, and we will continue to manage our costs responsibly.” According to the publication, Gale also said Meta will “continue to evolve teams as needed” and “try to redeploy talent.” According to a March report from Reuters, the company could cut nearly 20 of its total workforce this year. Zuckerberg also said in the meeting that Meta has faced headwinds since the U.S. war in Iran started earlier this year. “If oil prices go up, then consumers spend more of their money on oil, on gas, and less on things that they would just buy; that are just kind of discretionary things that the advertising might serve,” he said. Meta shares fell by as much as 10 early Thursday. At the meeting, Zuckerberg attributed this to concerned investors after Meta increased its projected capital expenditures for the year, as well as the company’s preview of slower growth during the second quarter, according to the Journal. Meta announced this year’s plans to spend upwards of 145 billion—largely on AI infrastructure—and it seems there are going to be more shakeups for the employees along the way.