Big Tech Layoffs at Microsoft and Meta as AI Investment Rises

Tech giants Meta and Microsoft are reducing their global workforce by thousands as both companies intensify spending on artificial intelligence and restructure operations to boost efficiency.

Meta informed employees that it will eliminate around 10% of its workforce, affecting nearly 8,000 staff members, as part of an efficiency-driven restructuring plan. The company is also closing approximately 6,000 open positions as part of its broader organisational overhaul. The changes are set to take effect from 20 May.

On the same day, Microsoft announced voluntary retirement options for about 7% of its US-based workforce, particularly targeting long-serving employees who meet specific eligibility criteria. The move affects parts of its estimated 125,000-strong American workforce.

While Meta’s internal communication from Chief People Officer Janelle Gale did not directly mention artificial intelligence, she noted that the restructuring is intended to support other strategic investments. However, Meta CEO Mark Zuckerberg has previously been more explicit, stating that AI advancements are already reducing the need for large teams. He highlighted that tasks which once required multiple employees can now be handled by a single highly skilled worker due to AI tools.

Meta is simultaneously ramping up its AI ambitions, with plans to invest between $115 billion and $135 billion in artificial intelligence infrastructure—nearly double its previous capital expenditure levels.

Microsoft has also significantly increased its AI spending projections, with estimates suggesting investments could reach up to $120 billion in the coming fiscal cycle. The company has already reported that internal AI tools are improving productivity, including automating a significant portion of coding work.

Microsoft CEO Satya Nadella has publicly emphasized the company’s rapid AI adoption, stating that artificial intelligence is already transforming workflows and boosting efficiency across operations.

Meanwhile, Microsoft AI chief Mustafa Suleyman has suggested that AI could eventually replace a large portion of white-collar tasks within the next few years, highlighting the disruptive potential of the technology.

The restructuring trends at both companies reflect a broader shift across the tech industry, where firms are balancing workforce reductions with heavy investment in AI infrastructure and development.

Similar moves have been observed across the sector, as companies increasingly integrate automation into core operations while reducing headcount. This has raised concerns among tech workers about job security, particularly as AI systems take on more responsibilities traditionally handled by humans.