Meta Platforms to Lay Off 600 AI Workers, Report Says

Mark Zuckerberg, chief executive officer of Meta Platforms. (David Paul Morris/Bloomberg)

Key Points

• Meta Platforms is reorganizing its artificial intelligence units, reportedly initiating layoffs of 600 workers.
• The company is investing heavily in AI, with approximately $70 billion in capital expenditures planned for data centers this year.
• Alexandr Wang, founder of Scale AI, joined Meta as Chief AI Officer after Meta acquired 49% of Scale AI for a $29 billion valuation.

Meta Platforms CEO Mark Zuckerberg has been on a mission to restructure the company’s artificial-intelligence efforts since the company released its Llama 4 family of AI language models in April to little acclaim. It has taken another big step in that effort, according to a report.

On Wednesday, Axios reported that the company will begin to lay off 600 workers across its AI units in a reorganization effort. Meta didn’t immediately respond to a Barron’s request for comment.

Meta is betting a lot on AI. This year it is going to spend around $70 billion on capital expenditures to build out AI data centers. On top of that, it has been on a hiring spree, reportedly offering nine-figure multiyear deals to the top AI researchers in the world.

At the center of it all is Alexandr Wang, the founder and former CEO of the start-up Scale AI. In June, Meta bought 49% of Scale AI at a $29 billion valuation, double what it was before.

But the real prize was getting Wang to leave Scale AI to become the chief AI officer at Meta Superintelligence Labs, with four teams below him. Among those teams, TBD Lab houses the new pricey AI researchers. FAIR is the oldest unit, which had been working on the Llama models. There is also a team for all the AI data centers Meta is building, and one for products like its Meta AI chatbot.

This has scrambled the organizational structure. Longtime Chief AI Scientist Yann LeCun has been sidelined, and one of the new TBD Lab hires, Shengjia Zhao, also holds a chief scientist title, according to a July Threads post from Zuckerberg. According to Axios, the layoffs are happening outside of TBD Lab, which is now tasked with Meta’s AI models, and indeed, TBD is still hiring.

Zuckerberg is never one to stand still when he thinks something is threatening Meta. Alone among the big capital investors in AI, Meta is buying all this computing capacity for itself, not to rent out to customers in the cloud, as Amazon Web Services, Microsoft’s Azure, and Alphabet’s Google Cloud Services do. The company borrowed over $10 billion last year to finance the buildout, and just arranged for a $27 billion package for a vast Louisiana data-center joint venture.

Zuckerberg’s big moves to prevent his company from being disrupted by AI have left his AI organization in a state of flux. These layoffs may just be the beginning of changes to create a more durable organization that can lead Meta’s AI efforts.

Write to Adam Levine at adam.levine@barrons.com