Meta Plans to Lay Off 8,000 Employees, Impacting 10% of Workforce
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1 hour ago
0mins
Should l Buy META?
Source: seekingalpha
- Layoff Announcement: Meta is reportedly planning its first wave of layoffs on May 20, targeting approximately 8,000 employees, which constitutes 10% of its global workforce, marking this as an initial round with further cuts anticipated in the second half of the year.
- Significant Historical Cuts: This round of layoffs will be the largest since late 2022 and early 2023 when Meta eliminated 21,000 jobs, reflecting the company's adjustments in what it termed a 'year of efficiency' after post-COVID growth assumptions proved unsustainable.
- Impact of AI Investments: While the exact reasons for the layoffs remain unconfirmed, Meta's heavy investment in AI technology mirrors trends seen in other tech firms, suggesting that the rise of AI may reduce the need for staff, thereby influencing this layoff decision.
- Modest Stock Boost: Despite the concerns surrounding the layoffs, the news provided a modest boost to Meta's stock price into the close, indicating a cautious optimism among investors regarding the company's future adjustments.
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Analyst Views on META
Wall Street analysts forecast META stock price to rise
44 Analyst Rating
37 Buy
6 Hold
1 Sell
Strong Buy
Current: 676.870
Low
655.15
Averages
824.71
High
1117
Current: 676.870
Low
655.15
Averages
824.71
High
1117
About META
Meta Platforms, Inc. is building human connections, powered by artificial intelligence and immersive technologies. The Company's products enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality (VR) and mixed reality (MR) headsets, augmented reality (AR), and wearables. It also helps people discover and learn about what is going on in the world around them, enabling people to share their experiences, ideas, photos, videos, and other content with audiences ranging from their closest family members and friends to the public at large. The Company's segments include Family of Apps (FoA) and Reality Labs (RL). FoA segment includes Facebook, Instagram, Messenger, WhatsApp and Threads. RL segment includes its virtual, augmented, and mixed reality related consumer hardware, software and content. Its product offerings in VR include its Meta Quest devices, as well as software and content available through the Meta Horizon Store.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Funding Plans and Strategic Goals: Allbirds plans to rebrand as NewBird AI and aims to raise $50 million by the second quarter of 2026 to support the acquisition of high-performance AI computing hardware and long-term leasing services, targeting a gap in the market for AI computing resources.
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- Significant Historical Cuts: This round of layoffs will be the largest since late 2022 and early 2023 when Meta eliminated 21,000 jobs, reflecting the company's adjustments in what it termed a 'year of efficiency' after post-COVID growth assumptions proved unsustainable.
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- Modest Stock Boost: Despite the concerns surrounding the layoffs, the news provided a modest boost to Meta's stock price into the close, indicating a cautious optimism among investors regarding the company's future adjustments.
See More
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- Pricing Model Shift: Anthropic is transitioning from flat-rate enterprise pricing to per-token billing, ensuring that revenue reflects actual usage, a strategy aimed at addressing the economic imbalance caused by changes in agentic AI usage patterns, thereby enhancing the company's competitive position in the market.
- Increasing Industry Pressure: As the AI industry gradually accepts per-token billing models, companies like OpenAI face similar transformation pressures, potentially leading their customers to reassess AI usage efficiency, which could affect future market performance and investor confidence.
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See More
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- Token Consumption Distortion: As token consumption for AI usage surges, companies like Meta and Shopify are tracking employee token usage, yet this practice may lead employees to optimize spending rather than actual output, impacting the return on investment for enterprises.
- Market Demand Uncertainty: CEO Dario Amodei highlighted that data centers take 1-2 years to build, leading companies to commit billions for unverified demand, which could result in over-investment or customer loss, affecting long-term financial health.
- Increasing Industry Pressure: As competition in the AI sector intensifies, companies like OpenAI are also considering pricing adjustments; Anthropic's per-token billing model may become the future industry standard, prompting others to reassess their business models.
See More
