Meta is reportedly preparing one of the largest workforce reductions in its history, with plans under discussion that could cut at least 20 percent of its global staff, according to multiple sources cited by Reuters. The move would mark a new phase in the company’s transformation into an AI-first business, as it seeks to fund massive infrastructure spending while promising greater efficiency.

Meta employed about 79,000 people at the end of last year. A 20 percent reduction would affect roughly 16,000 workers, trimming billions of dollars from ongoing salary, benefits and stock-based compensation. It would also be the most significant restructuring since the sweeping layoffs of late 2022 and early 2023, when more than 21,000 employees were let go in two major rounds.

Internally, senior leaders have been told to prepare to operate with smaller teams and to map out how their divisions would function with a sharply reduced headcount, the sources said. While no formal timeline has been communicated, the guidance signals that cuts are seen as inevitable rather than hypothetical.

Publicly, Meta is pushing back on the reports. Company spokesperson Andy Stone described the coverage as speculative and framed the scenarios as theoretical, even as planning appears to be underway behind the scenes.

The financial backdrop is stark. Meta expects capital expenditures to climb to as much as 135 billion dollars in 2026, nearly double what it spent the previous year. Much of that budget is earmarked for AI infrastructure, including new data centers, Nvidia GPUs and custom chips designed to power large-scale generative models and recommendation systems across Facebook, Instagram and WhatsApp.

Executives are under pressure to show that Meta can afford this pivot without undermining profitability. According to people familiar with the discussions, job cuts are being treated as a de facto financing mechanism for AI: a way to reallocate operating expenses from people to hardware, software and elite technical talent.

Meta has already been paying top dollar for that talent. The company recently committed billions to deepen its AI capabilities and bring high-profile leaders into the fold, reinforcing CEO Mark Zuckerberg’s message to investors that advances in AI will allow the company to do more with fewer employees.

On a recent earnings call, Zuckerberg said projects that once required large teams can now be handled by a single highly skilled person armed with powerful AI tools. That vision underpins Meta’s bet that a leaner workforce, paired with heavy AI investment, will define its next chapter.