What's Happening at Meta? "AI Layoffs", Intrusiveness, and a History of Bad Management

Meta announced a new round of layoffs. Starting May 20, 2026, the company plans to lay off around 8,000 people. The reason given is AI.

If this wasn't enough, recent information reported by Fast Company, Reuters, and the Times, among others, is that the company is not guaranteeing an appropriate workplace for remaining employees. One of the latest measures taken is mouse-tracking surveillance to further train its AI systems. Employees found it extremely invasive, alongside the already low morale caused by the layoffs.

What the data says

According to LinkedIn, the company increased headcount by 1% in the last month and by 13% in the last year. The distribution of functions is concentrated mostly in the engineering, media, and sales departments. Sales, in particular, saw a headcount increase of 41% in the last year. According to the official Meta website, current open roles focus on AI research, data, and engineering. The tech giant appears highly focused on building out its sales operation, alongside investing in roles that can build on the AI investments Meta has made.

The last earnings call of Meta — Q1 2026

Meta's total revenue in Q1 2026 was $56.31 billion. A positive result, on the surface. The capital expenditure, or capex (the money a company spends on physical, long-term assets), amounts to $19.84 billion. In the words of Mark Zuckerberg, Meta expects "2026 capital expenditures [...] to be in the range of $125–145 billion, increased from [their] prior range of $115–135 billion."

The increased capex is largely due to Meta's AI strategy. The company is running three types of chips simultaneously: their own custom silicon developed with Broadcom, AMD chips, and Nvidia systems. The logic is specific: by developing their own custom supply in the long term, Meta wants to avoid relying on a single provider and reduce its dependence on Nvidia.

When this data is read alongside the layoffs, the question becomes: is the company laying off people because of AI productivity, or to look like a strong AI company? To answer, a few more pieces need to be added.

The Meta failures

Meta is well known for products and services that didn't get off the ground. In 2021, Zuckerberg called the metaverse the next frontier and went all in on it. The name change from Facebook to Meta followed, along with the creation of a set of tools, services, and infrastructure to support it. Reality Labs lost over $73 billion in the process, $19.1 billion in 2025 alone. In 2026, the company confirmed the shutdown of Horizon Worlds.

And not to forget the failures of Facebook Commerce and Libra, the cryptocurrency later renamed Diem. Zuckerberg's predictions have gone wrong many times, which makes it interesting to read the words of Megan Duncan, an associate professor at Virginia Tech who studies social media. She said that "He [Zuckerberg] went all-in on it [the metaverse], and he missed the boat on AI."

Where is Meta standing now? Is it really an AI competitor?

The answer appears to be no. Putting together the earnings call data, the layoff announcement, Meta's track record of failures, and its stated aspirations, two things become clear. Meta is increasing its sales headcount because it is still pushing a commercially unsuccessful product ("we are focused on making our VR business sustainable as we invest more in other areas like AI and glasses," in the words of Zuckerberg). And Meta is an advertising business, not an AI giant.

The Q1 2026 earnings call alone tells the story: of the $56.31 billion in total revenue, advertising accounted for $55.02 billion, roughly 97.7% of the total. The market appeared to understand it. Despite the headline revenue figure, Meta's stock fell by over 8% in a single day following the earnings call publication.

Meta and layoffs: are they really "AI layoffs"?

If by AI layoffs we mean the capability of AI to replace people, it is clear that Meta is not laying off people because of AI. If we consider "AI layoffs" as an increased share of investment moved toward AI, the answer is yes only partially, because in this case the layoffs are more attributable to mismanagement.

Once again, AI is not replacing people, despite what companies and headlines say.

Editor's note

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