Rarely does a company announce a multi-billion dollar expansion and a sweeping workforce reduction in the same news cycle. Yet Meta managed both on Monday, and the market responded positively to the combination, which tells you quite a bit about where investor priorities currently sit right now.
The headline deal involves Nebius, a Dutch AI data center company that agreed to sell Meta $12 billion in computing capacity beginning in 2027. Specifically, the arrangement gives Meta access to Nvidia’s Vera Rubin platform, and beyond that initial commitment, Meta also reserved the right to purchase up to $15 billion in additional compute capacity over a five-year window. In total, therefore, the deal reaches as high as $27 billion.
Nebius shares jumped over 12% on the news, building on a 30% gain the company had already posted over the prior month. Just the week before, furthermore, Nvidia separately disclosed a $2 billion investment in Nebius to expand data center capacity past five gigawatts by 2030. For a company that only recently emerged into broader visibility, those are significant validation signals arriving in rapid succession.
The layoff reports surfaced through Reuters over the weekend, citing three sources familiar with the situation. According to those sources, Meta is exploring cuts of up to 20% of its workforce, primarily to offset the mounting costs of its AI infrastructure buildout. Nothing has been finalized yet in terms of timing or exact scope.
However, if the company follows through, it would represent the largest restructuring since Mark Zuckerberg’s cost-cutting push in late 2022 and early 2023, when Meta reduced its headcount by roughly 21,000 people across four months.
The financial context behind these moves is worth sitting with. Meta projected spending between $115 billion and $135 billion on AI in 2026 alone, nearly double the $72 billion it spent the previous year. That spending covers Superintelligence Labs, in-house chip development, and an ambitious data center construction program the company expects will cost $600 billion through 2028. Additionally, high-profile acquisitions like the $14.3 billion Scale AI deal continue adding to that total.
Meta is far from alone in using AI investment as both a growth strategy and a rationale for workforce reduction. For example, Block and Atlassian have also recently announced significant reductions, with each company linking their decisions to AI-driven changes in operations.
Thus, the pattern in the industry is becoming more difficult to ignore.
