Meta Platforms is planning to lay off over 20% of its workforce, potentially affecting more than 15,000 employees, as part of efforts to offset its substantial AI spending plans for 2026. The timing and details of these cuts have not been finalized, but senior leaders have been instructed to prepare for headcount reductions, according to three anonymous sources cited by Reuters. Meta shares rose 2.7% in premarket trading following the news, after previously dropping nearly 4% on Sunday. As of December 2025, Meta employed nearly 79,000 people, making this the largest layoff since late 2022, when 11,000 jobs were cut. A Meta spokesperson described the report as 'speculative' regarding theoretical approaches. The layoffs are part of a broader industry trend, with companies like Block and Amazon also announcing significant job cuts linked to AI investments in 2026. AI has been cited in over 12,000 job cuts in the U.S. so far this year, according to Challenger Gray & Christmas [1].
Meta has also signed a long-term agreement to spend up to $27 billion on AI infrastructure from Dutch cloud provider Nebius. The deal includes $12 billion of dedicated capacity and up to $15 billion of additional compute capacity over five years, with deployments featuring Nvidia's latest Vera Rubin chips. Nebius shares surged 14% in premarket trading following the announcement. Nebius, founded in 2022 and listed in New York in 2024, has seen its share price increase more than 400% since listing and 35% so far in 2026. The company also secured a $2 billion investment from Nvidia last week, which led to a 16% jump in its stock price. Nebius' founder and CEO, Arkady Volozh, stated that the partnership with Meta would accelerate the build-out and growth of Nebius' core AI cloud business [2].
Meta's AI-related capital expenditure is projected to reach between $115 billion and $135 billion in 2026, roughly double its 2025 spending. This forms part of a combined $700 billion in AI investments planned by hyperscalers including Amazon, Alphabet, and Microsoft. Investor interest in the AI cloud sector is rising, as evidenced by Nscale's recent $2 billion fundraising at a $14.6 billion valuation, with Nvidia among the investors. Meta's CEO Mark Zuckerberg has emphasized that 2026 will be a major year for AI, focusing on 'building personal super intelligence.' Last year, Meta invested $14.3 billion in Scale AI and recruited its CEO, Alexandr Wang, along with key engineers and researchers [1][2].
The scale of Meta's planned layoffs and AI investments has raised concerns among some investors about the sustainability of such spending relative to AI-generated revenue. Analyst commentary from Jefferies suggests that Meta's willingness to reduce headcount while ramping up AI investment signals a broader shift toward AI-driven productivity across the tech sector [1].
CONCLUSION
Meta's announcement of significant layoffs and a $27 billion AI infrastructure deal with Nebius underscores its aggressive push into AI, with capital expenditures set to reach up to $135 billion this year. The moves have triggered positive market reactions for both Meta and Nebius, but also raised investor concerns about the sustainability of such spending. The developments signal a broader industry shift toward AI-driven productivity and infrastructure investment.