Meta has laid off around 700 employees as part of ongoing restructuring efforts while simultaneously unveiling a new stock option programme for six top executives that could be worth up to $921 million (£689 million) each.
The move highlights the company's shift towards artificial intelligence and its ambition to become a dominant player in the technology sector. The layoffs affect staff across Reality Labs, recruiting, sales, and Facebook, a person with knowledge of the matter said.
The cuts represent a small fraction of Meta's 78,000-strong workforce but signal a prioritisation of AI-driven initiatives over some existing business units.
A Meta spokesperson said: 'Teams across Meta regularly restructure or implement changes to ensure they are in the best position to achieve their goals. Where possible, we are finding other opportunities for employees whose positions may be impacted.'
Executive Stock Rewards Spark Controversy
The company's stock programme applies to six top executives, including Andrew Bosworth, chief technology officer, Chris Cox, chief product officer, Susan Li, chief financial officer, Javier Olivan, chief operating officer, Dina Powell McCormick, president and vice chairman, and C.J. Mahoney, chief legal officer.
According to The New York Times, the layoffs spanned Reality Labs, recruiting, sales and Facebook teams, even as the company introduced these substantial executive stock incentives.
According to analysis by compensation research firm Equilar, some executives could see stock options valued at as much as $921 million (£689 million) if Meta reaches its ambitious growth targets, including a goal to become a $9 trillion (£6.73 trillion) company by 2031.
Meta emphasised that the stock options are contingent on the company achieving 'massive future success' and that the programme is designed to retain talent in the competitive AI sector. Mark Zuckerberg, Meta's chief executive, did not receive new stock options.
AI Ambitions Drive Corporate Strategy
The company has invested heavily in artificial intelligence over the past year, hiring a team of specialists and planning to spend at least $115 billion (£86.07 million) in 2026, primarily on AI development and new data centres.
Zuckerberg has stated that AI will transform how employees work, allowing smaller teams to accomplish tasks that previously required larger groups.
Meta's focus on AI comes alongside broader organisational changes. Last year, Reality Labs, the division responsible for virtual reality and metaverse products, cut 10 to 15% of its workforce. Analysts say the company's restructuring reflects the broader tech industry trend of prioritising AI while streamlining other operations.
Legal and Financial Pressures
Meta faced a challenging day as the layoffs were announced. A Los Angeles jury found the company liable for harm caused to a young Instagram user due to addictive design features, a verdict that could trigger further lawsuits over user well-being.
The ruling coincided with the company's announcement of employee cuts, adding to scrutiny over Meta's corporate practices.
The disparity between layoffs and executive rewards has drawn attention from industry observers and employees alike.
Meta has stressed that the stock options are long-term incentives tied to company performance and shareholder value rather than immediate compensation.
Industry and Employee Context
The layoffs and executive incentives occur amid ongoing debate in the technology sector about workforce management, compensation, and AI-driven efficiencies.
As Meta moves to become a leader in artificial intelligence, employees in divisions affected by cuts are left navigating the consequences of corporate restructuring, while executives stand to benefit from ambitious growth targets.
The stock programme marks the first such award since Meta went public in 2012 and is intended to keep the company competitive with other AI-focused firms.
Analysts say these moves underline the company's determination to prioritise technological innovation and long-term growth, even as it navigates legal challenges and workforce reductions.
Originally published on IBTimes UK
