Two of the world’s largest technology companies announced sweeping workforce reductions on the same day last week, each citing the escalating cost of building artificial intelligence infrastructure as the primary driver of decisions that will collectively affect more than 16,000 workers.
Meta said it will cut roughly 8,000 employees, representing about 10 percent of its global workforce, effective May 20, 2026. The company also said it will leave approximately 6,000 currently open positions unfilled, further tightening headcount. Chief People Officer Janelle Gale told staff the restructuring was aimed at improving efficiency and supporting the company’s ongoing investments in artificial intelligence.
Meta has already warned investors that its 2026 expenses will climb to between $162 billion and $169 billion, driven by infrastructure spending and the increasingly competitive compensation packages it is offering to attract AI specialists. Amazon, Google, Meta, and Microsoft alone are projected to spend a combined $650 billion on capital expenditures in 2026.
Wedbush analyst Dan Ives welcomed the cuts in a note to investors, arguing that Meta was using AI tools to automate tasks that once required large teams, allowing it to streamline operations and reduce costs while maintaining productivity, and that this was driving the need for a leaner operating structure.
Hours before the layoff memo leaked, Meta had awarded its six most senior executives stock options worth up to $921 million each, tied to a market capitalisation target of $9 trillion by 2031, underscoring that the cuts were not driven by financial distress but by a strategic decision to redirect spending from payroll to machines and infrastructure.
On the same day, Microsoft took a softer but structurally similar approach. The company announced voluntary buyouts available to roughly 7 percent of its United States employees, or around 8,750 workers, under an eligibility formula based on combined age and years of service. Chief People Officer Amy Coleman said the programme was designed to simplify operations and maintain pace as the company expands its AI and cloud infrastructure globally.
CNBC reported on a memo from Coleman in which she said the company wanted to give eligible employees the choice to take that next step on their own terms, with generous company support. The voluntary buyout programme is described as the first of its kind in Microsoft’s 51-year history.
Microsoft has been running an aggressive performance management programme throughout 2025, instructing managers to issue significantly more performance improvement plans and barring employees who failed benchmarks from reapplying for two years. The buyout is the softer instrument that follows those harder measures.
The twin announcements reflect a broader restructuring of the global technology workforce. The layoffs follow years of cuts across major tech firms after pandemic-era workforce expansions, with Google, Amazon and Oracle having also reduced headcount at various points in the past year.
