Meta plans 1,500 job cuts as focus towards AI and data centres surges

Meta is preparing to fire roughly 1,500 people across multiple roles from its Reality Labs division, a move that highlights a widening internal shift as the company pours capital into artificial intelligence and massive data centre projects. According to a report by The New York Times, the layoffs could be announced as early as Tuesday and are expected to impact about 10 per cent of the unit’s workforce. Reality Labs currently has around 15,000 employees.

The potential job cuts come at a time when Meta is significantly expanding investment in AI infrastructure, raising fresh questions about the future direction of its metaverse-focused arm.

Reality Labs oversees Meta’s virtual and augmented reality portfolio. The unit originated from Oculus, the VR headset startup founded by Palmer Luckey and initially funded via Kickstarter, which Facebook acquired in 2014. Since then, it has grown into the company’s central hub for VR and AR hardware and software, spanning headsets, Ray-Ban smart glasses and the Horizon Worlds platform, once positioned as a cornerstone of Meta’s metaverse vision.

Internal tensions have reportedly intensified ahead of the expected announcement. The New York Times reported that Meta’s chief technology officer, Andrew Bosworth, has scheduled an all-hands meeting for Reality Labs employees on Wednesday, calling it the “most important” meeting of the year. Staff have been asked to attend in person, with the meeting set to take place a day after the layoffs are expected to be disclosed.

Uncertainty around Reality Labs has been mounting for months. In December, Gizmodo journalist James Pero wrote that a planned 30 per cent budget reduction for the division pointed to a broader reallocation of resources within Meta. While the move did not signal an immediate abandonment of metaverse efforts, it indicated that other priorities were increasingly commanding attention.

AI investment accelerates

That rebalancing became more visible this week. On Monday, Meta unveiled an ambitious expansion of its data centre network under a new programme called Meta Compute. The company said it plans to build “tens of gigawatts” of AI compute capacity by the end of the decade, a scale of infrastructure that would draw power comparable to that used by several large cities.

Meta also announced a senior leadership addition on the same day. Dina Powell McCormick, a former adviser to US presidents George W. Bush and Donald Trump and a longtime banking executive, will join the company as president and vice chairperson. The appointment is expected to support Meta’s policy engagement, government relations and partnerships as it advances infrastructure-heavy projects.

Meta chief executive Mark Zuckerberg framed the AI build-out as a long-term competitive play, saying, “How we engineer, invest, and partner to build this infrastructure will become a strategic advantage.” He had used similar language in 2022 while defending heavy spending on metaverse technology, arguing at the time that such investments would strengthen the company over the long term.