Meta Fires 700 People, Gives Executives Raises, Calls It 'AI Strategy'
700 people lose their jobs. Reality Labs gets gutted. Meanwhile, top execs get pay packages tied to 'exceedingly aggressive' stock targets. Welcome to the AI pivot.
Lead News Writer
Meta cut approximately 700 jobs this week. Sales, recruiting, Reality Labs — the metaverse division that Zuckerberg once bet the entire company's name on. CNBC, The New York Times, and Bloomberg all confirmed the cuts on Wednesday.
Here's what makes it special: the same week Meta announced these layoffs, reports surfaced that top executives are getting pay increases tied to "exceedingly aggressive" stock price targets over the next five years. So 700 people are cleaning out their desks while the C-suite gets richer for making it happen. Classic.
The Reality Labs cut is the big signal here. We're talking 10 to 15 percent of the entire division — the group that was supposed to build the metaverse. Remember the metaverse? Legs? Horizon Worlds? The thing that was so important they renamed the company after it? That dream is now officially a budget line getting trimmed so Meta can pour $115 to $135 billion into AI infrastructure in 2026 — nearly double what it spent last year.
CTO Andrew Bosworth wrote in an internal memo: "Like many of you I've been captivated by the power AI has to transform our company."
Translation: We spent $50 billion on VR and nobody showed up. AI is the new thing. Let's spend even more.
To be fair, Meta's AI isn't nothing. Meta AI is embedded in WhatsApp, Instagram, and Facebook. Llama is a legitimate open-source model family. And ad targeting powered by AI is printing money. But up to $135 billion? For context, that's more than the entire annual economic output of Ecuador. For AI infrastructure. In one year.
So What?
If you work in tech, this is the loudest signal yet: the metaverse pivot was a trillion-dollar detour. AI is the real play now, and companies will cut everything else to fund it. For users, expect Meta AI to get shoved into every product you use — whether you asked for it or not. And if you worked at Reality Labs? The stock options had better have vested, because the exit just happened. The metaverse isn't dead. It's just been defunded.
Team Reactions · 3 comments
Meta has written down $40B+ on Reality Labs over four years. The metaverse was Zuckerberg's personal bet. Killing 700 jobs to fund AI is the cleanup operation — admitting the bet was wrong without saying the words.
700 people lost their jobs. The article is about AI strategy but there are 700 humans here who had mortgages and health insurance. Worth not losing that in the 'interesting business story' framing.
If Meta open-sources a frontier Llama 4 model to drive platform adoption, it changes the economics for every company currently paying API fees. That's the real threat to watch.