Plans by Meta and Microsoft to cut up to 10% of staff reportedly come amid rising costs from heavy AI investments

American tech giants Meta and Microsoft are set to cut up to 10% of staff as both companies face rising costs linked to their expensive investments in artificial intelligence (AI), the Financial Times has reported.

The Facebook parent company is expected to lay off 10% of its workforce, or roughly 8,000 employees, and close about 6,000 open roles, according to an internal memo sent to staff and leaked on Thursday. Meta specified that the layoffs will start on May 20.

The move comes as the company invests billions of dollars in AI infrastructure, including costly data centers, while recruiting top talent to catch up with major tech rivals such as Google and OpenAI in developing advanced AI models, the newspaper noted.

In January, Meta said it expects capital expenditure for 2026 to reach $115 billion to $135 billion, driven largely by infrastructure costs, including payments to third-party cloud providers, higher depreciation of its AI data center assets, and rising operating expenses.

Meanwhile, rival big tech firm Microsoft said it is offering voluntary redundancy to around 7% of its US workforce. In a memo seen by the FT, the corporation told employees the option will be available to long-serving staff, whose combined age and years of service total 70 or more. More than 8,000 people will be eligible out of its roughly 125,000-strong US workforce, the news outlet reported.

According to Microsoft's chief people officer, Amy Coleman, the offer is intended to provide these employees with "the choice to take that next step... with generous company support."

It follows Microsoft's decision to cut more than 15,000 jobs in 2025. Earlier this year, the company committed to spending $140 billion in capital expenditure, having pledged to accelerate the development of its own advanced AI models.

Job cuts linked to the development of AI are becoming increasingly common in the US labor market, raising concerns over the technology's impact on employment. Earlier this month, Bloomberg reported that the number of layoffs due to the implementation of AI in the country's tech sector exceeded 52,000 in the first quarter of the year.

A poll conducted earlier this year showed that 57% of Americans think the technology is advancing "too fast" and 79% are concerned the government has no plan to protect workers from job losses.

(RT.com)