Meta Platforms (NASDAQ:META) is executing a strategic reorganization of its nearly 79,000-person workforce, laying off 700 employees across Reality Labs, social media, sales, and talent acquisition.
The reductions reflect a decisive shift in corporate priority, moving resources away from the metaverse and toward a massive buildout of artificial intelligence infrastructure.
Chief Executive Mark Zuckerberg has signaled that the company intends to spend between $115 billion and $135 billion this year on AI initiatives, primarily focused on hardware and data center expansion, including a new agreement to integrate Arm-based central processing units.
The pivot follows a period of significant financial strain within the Reality Labs division, which has recorded $76.9 billion in cumulative losses since 2021.
In addition to the latest headcount reductions, Meta previously cut 10% of its Reality Labs staff in January and shuttered three virtual reality studios.
The company has also moved to optimize its physical footprint, abandoning several real estate leases in the Pacific Northwest—space that has since been acquired by Apple—and halting updates for its VR workout software suite.
While the company trims its broader workforce, it has introduced its first executive equity compensation plan since its 2012 initial public offering.
The program targets six top leaders, including Chief Product Officer Chris Cox, Chief Financial Officer Susan Li, and Chief Technology Officer Andrew Bosworth.
Under the plan, executives could receive options worth up to $921 million each, provided Meta achieves a $9 trillion market capitalization by 2031.
For context, the company’s current market capitalization stands at approximately $1.5 trillion.
Zuckerberg, who is not a participant in the new stock option plan, told investors that generative AI will fundamentally transform labor dynamics by allowing solo workers to perform the tasks of entire teams.
A Meta spokesperson stated that the reorganization is intended to align personnel with these long-term strategic objectives and that the company is attempting to transition affected employees into other internal roles where possible.