Meta is eyeing massive layoffs that could affect 20% or more of its workforce, as it looks to offset its costly artificial intelligence (AI) efforts.

The sweeping layoffs were first reported by Reuters, which spoke to three sources familiar with the matter. The sources wished to remain anonymous because they were not authorized to disclose those plans.

The sources said that as of now, no date has been set for the layoffs, and the scale has not been finalized.

Two of the people said that top executives discussed the plans with other senior leaders at Meta and instructed them to begin planning how to scale back staffing.

"This is speculative reporting about theoretical approaches," Meta spokesperson Andy Stone said when asked about the plans.

The potential 20% cut will be the biggest company restructuring since late 2022 and early 2023. In November 2022, Meta laid off around 13% of its workers (11,000 staffers). Months later, it cut another 10,000 jobs.

According to the company’s latest filing, it employed nearly 79,000 people as of December 31st.

AI efforts are costing tech giants billions of dollars, and an increasing number of major players are announcing layoffs tied to AI.

In January, Amazon cut around 16,000 jobs, part of the company’s October announcement to trim its workforce by 30,000. The fintech company Block cut nearly half of its staff (more than 4,000 people), with CEO Jack Dorsey citing AI as becoming more capable of helping companies do more with smaller teams. He also suggested that other companies are likely to do the same.

“I think most companies are late. Within the next year, I believe the majority of companies will reach the same conclusion and make similar structural changes. I’d rather get there honestly and on our own terms than be forced into it reactively,” he said in a post on X.

Earlier in February, Meta also reduced its annual distribution of stock options for most employees for the second year in a row by roughly 5%.

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