Meta cuts hundreds of jobs in Reality Labs and sales while ramping up AI spending

On March 25, 2026, Meta began a new wave of layoffs, affecting Reality Labs, Facebook, recruiting, sales and global operations teams. The company keeps reallocating money and people toward AI, while sharply increasing spending on data centers, accelerators and its own model ecosystem.

Scale of the cuts

According to sources, hundreds of employees are affected. For Meta, with 78,865 employees at the end of 2025, this does not look like a sudden mass collapse, but in the context of recent months the picture is different: the company cuts staff in waves and rarely pauses. The current restructuring is presented as a routine adjustment of teams to business goals, but the list of affected units shows this is no longer a local correction but a rebuild of priorities.

In January, Meta had already cut about 1,500 people in Reality Labs, roughly a tenth of the division, and closed three VR studios: Twisted Pixel, Sanzaru Games and Armature Studio. Before that, the company carried out performance-based layoffs affecting roughly 3,600 employees. In mid-March, reports surfaced of possible plans to prepare cuts of up to a further 20% of staff, although Meta itself called such estimates speculative. The March wave therefore looks less like a separate episode than a continuation of a long restructuring.

Where the money is going

The reason for this wave is fairly clear: Meta is sharply raising its bet on AI infrastructure. For 2026, the company has budgeted capital expenditures of $115 billion to $135 billion, versus $72 billion a year earlier. Meanwhile, the company's total expenses could reach $162–169 billion. That is a nearly twofold jump in investment, and the market seems willing to tolerate it if Meta becomes leaner, faster and tougher on costs at the same time.

The main spending areas are already clear:

• building and expanding data centers
• buying Nvidia GPUs for training and inference of models
• developing its own chips
• supporting the Llama ecosystem and Meta Superintelligence Labs

Reality Labs remains a sore spot. The division posted an operating loss of $19.2 billion for 2025, and cumulative losses since its creation have approached $90 billion. Meta is not abandoning its hardware ambitions entirely, but it is changing focus: instead of an expensive bet on VR headsets, it is looking increasingly at smart glasses and wearable AI devices, where it is easier to tie hardware to the current boom in assistants and personal models. In other words, money is leaving not hardware in general, but the old VR logic in favor of new AI scenarios.

Market logic

For investors, the signal is simple: if Meta spends tens of billions on AI, it has to show that the investment will pay off through efficiency gains. Against this backdrop, cutting support functions and slow-growing areas looks like an attempt to free up budget for more expensive infrastructure. Analysts are already warning that the company's free cash flow could drop sharply, but judging by the stock's reaction in March, the market is so far more worried not about the size of the spending but about how fast Meta turns it into product and margin.

This logic is not unique to Meta. In the first quarter of 2026, tech companies worldwide cut more than 45,000 jobs, and in at least one case in five AI was cited as the driver. Meta, for its part, says AI tools are already noticeably boosting engineers' output: the company cited growth in output per developer of about 30% since the start of 2025, and higher still among the heaviest users of internal AI systems. If those figures hold up, the "fewer people, more compute" model will take hold across the industry.

What it means

Meta is moving ever more clearly away from the metaverse as its main growth engine and betting on infrastructure, models and AI devices. For the market, it is one more marker: in 2026, big tech companies compete not on headcount but on access to compute, chips and the speed of putting AI into real products. For employees at such companies, it means a tighter link between the AI budget and job security.

*Meta has been designated an extremist organization and is banned in Russia.