AI is transforming the job market: Microsoft and Meta have announced massive layoffs
24 April 05:51
Tech giants Meta and Microsoft have announced major job cuts amid a sharp rise in spending on artificial intelligence development. This was reported by The Guardian and Reuters, according to "Komersant Ukrainian"
Meta plans to cut about 10% of its workforce, which amounts to nearly 8,000 employees, and to cancel approximately 6,000 open positions.
Microsoft, for its part, is launching a large-scale voluntary buyout program for some of its U.S. employees, which could affect about 8,000 people.
What is known about the layoffs at Meta
According to The Guardian, Meta, which owns Facebook and Instagram, plans to lay off about 10% of its total workforce—approximately 8,000 employees.
In addition, the company will not fill another 6,000 previously open positions.
The publication links this decision to the company’s desire to improve efficiency and redirect more resources to other areas, primarily AI development.
Meta had previously sharply increased its capital expenditure forecast for 2026: the company now expects to invest between $115 billion and $135 billion in infrastructure and related projects.
Reuters reported that this is 73% more than a year earlier, and the main reason for this jump is Mark Zuckerberg’s bet on the development of so-called “superintelligence” and the scaling of AI infrastructure.
“In an internal memo to Meta employees, Janelle Hale, chief people officer, did not mention artificial intelligence directly, but said the cuts would allow the company to ‘offset other investments we’re making,’” writes The Guardian.
She emphasized that laid-off employees would receive generous severance packages.
Mark Zuckerberg himself, according to the publication, has publicly stated that the development of artificial intelligence reduces the need for mass hiring.
“We’re starting to see projects that previously required large teams now being carried out by a single, very talented person,” he said at a January earnings conference.
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What is known about the layoffs at Microsoft
Microsoft has not announced classic mass layoffs in the same format as Meta, but has launched the first voluntary buyout program for employees in its history.
The program applies to U.S. employees at the senior director level and below, provided their combined age and tenure at the company total 70 or more. According to the FT, more than 8,000 employees will be eligible for this opportunity.
Microsoft explains that the program is designed to give employees the opportunity to transition to a new stage in their careers “on their own terms” and with support.
At the same time, the company is changing its internal approaches to evaluating managers and distributing stock, meaning this is not just about buyouts but also a broader restructuring of HR policy.
Why this is linked to AI spending
Both Meta and Microsoft are sharply increasing their spending on artificial intelligence. For Meta, the official target for 2026 is $115–135 billion in capital expenditures.
The Guardian reports that in July 2025, Microsoft projected it would spend approximately $100 billion on AI infrastructure in the next fiscal year. Analysts now estimate this figure at $110–120 billion.
Reuters previously reported that the company had already posted record quarterly spending on expanding its AI capabilities.
It is precisely this backdrop that explains why companies are simultaneously cutting staff and revising their HR policies: businesses are trying to free up resources for expensive infrastructure, data centers, chips, and products based on generative AI.
In a March review of Big Tech’s AI spending, Reuters noted that modern AI data centers cost billions of dollars, with the lion’s share of expenses going toward servers and graphics processing units.
What Microsoft Says About AI’s Impact on Human Work
According to The Guardian, Microsoft’s head of AI, Mustafa Suleyman, has publicly stated that in the relatively near future, artificial intelligence will be able to take over a significant portion of office work.
“Mustafa Suleyman, head of Microsoft’s artificial intelligence division, said in February that, in his opinion, artificial intelligence will be able to replace most office work within the next 12 to 18 months,” the article states.
The publication also notes that currently, about 30% of Microsoft’s software code is already generated by neural networks.
In its commentary on the tech labor market, Reuters noted that layoffs amid productivity gains driven by AI are already a broader trend. Similar processes are observed at other companies: businesses want to increase efficiency, automate more functions, and simultaneously reduce personnel costs.
In this sense, Meta and Microsoft are merely the most high-profile examples.
What does this mean for the tech market
The layoff announcements from the two tech giants came amid growing fears among tech company employees that their management would try to replace them with artificial intelligence. These fears are not unfounded.
Other companies doubling down on AI have also cut their workforces. The Block CEO Jack Dorsey cut nearly half of the company’s staff in early March, citing progress in AI development.
Amazon, which in February announced plans to spend a staggering $200 billion over the course of a single year, has laid off at least 30,000 employees over the past six months.
Oracle informed employees last month that it would also cut thousands of jobs.
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