Meta Platforms is reported to be cutting at least 20 per cent of its workforce to offset heavy spending on artificial intelligence.

The owner of Facebook, Instagram, and WhatsApp, which employed about 79,000 people worldwide at the end of 2025, has spent heavily in recent years to catch up with rivals by building data centres and waging a talent war. It expects a capital outlay of up to $135 billion in 2026 — roughly double of last year’s spending.

If Meta settles on the 20 per cent figure, the cuts will be the biggest since a restructuring in 2022-23 dubbed the “year of efficiency”, which eliminated about 21,000 jobs.

“This is speculative reporting about theoretical approaches,” a spokesperson for the company said.

A 20 per cent staff cut could amount to about $6 billion in cost savings, or a 5 per cent boost to adjusted core earnings, according to Barton Crocket, an analyst at Rosenblatt Securities.

“This doesn’t have to stop at 20 per cent. There could be more down the road if AI is truly this impactful on staff productivity,” he said.

Some analysts have noted that the layoffs also follow a period of over-hiring. Sam Altman, chief executive of OpenAI, said last month that some companies were blaming AI for the job cuts they would have made anyway.

“Is AI a convenient scapegoat for cuts that might have happened anyway? Perhaps. But we believe the market will quickly see through companies using AI as camouflage,” Mark Shmulik, an analyst at Bernstein, said.

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Investors have grown nervous about the scale of capital spending across the AI economy, with the combined outlay of Meta, Alphabet, Amazon, and Microsoft set to hit $700 billion this year.

Other large tech companies have announced job cuts this year.

In February, Block, the fintech firm founded by Jack Dorsey, the co-founder of Twitter, said it was laying off 4,000 employees, while Amazon cut 16,000 roles in January. Dorsey attributed the job cuts to the rising use of AI, telling shareholders that AI “fundamentally changes what it means to build and run a company”.

According to Layoffs, which tracks job losses across the sector, some 38,465 employees have been sacked by tech firms this year.

Meta shares closed up $14.27, or 2.3 per cent, at $627.45 in New York.