Meta and Microsoft are trimming their workforces by thousands as they make heavy investments in AI and executives claim that the technology is meeting their companies’ productivity needs.

Meta told staff on Thursday that on 20 May it would cut some 10% of its personnel – just under 8,000 employees– to boost efficiency, part of a layoff plan made months ago. The company is also closing about 6,000 open roles. The same day, Microsoft announced to employees, for the first time, that it would offer voluntary retirement to about 7% of its American workforce of roughly 125,000.

In an internal memo to Meta’s staff, Janelle Gale, the chief people officer, didn’t mention AI explicitly but said the cuts would allow the company to “offset the other investments we’re making”. In Meta’s fourth-quarter 2025

earnings presentation, the CEO, Mark Zuckerberg, spoke about a “major AI acceleration” that included plans to spend from $115bn to $135bn on AI – nearly twice the company’s capital expenditure the previous year.

“This is not an easy tradeoff,” Gale wrote. She emphasized that laid-off employees would receive generous severance packages.

Zuckerberg, in contrast to Gale, has said outright that AI is making some hiring unnecessary. “We’re starting to see projects that used to require big teams now be accomplished by a single very talented person,” he said in the January earnings call.

Meta confirmed news reports of the layoffs and internal memo, but declined to comment further.

Microsoft wrote to its employees on Thursday that it would be offering voluntary buyouts to longtime employees, in particular those for whom the sum of their ages and years at the company amount to 70 or greater, according to the FT. More than 8,000 employees would qualify, according to the FT. Microsoft did not immediately respond to a request for comment.

In July 2025, Microsoft forecast that it would spend some $100bn on AI infrastructure in the coming fiscal year. Analysts now estimate that figure to be $110bn-$120bn.

Mustafa Suleyman, Microsoft’s AI chief, said in February that he believes that AI will be able to replace most white-collar work within the next 12 to 18 months.

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