Meta Platforms (NASDAQ: META) is facing significant challenges in 2026, with shares fluctuating notably this year. After a strong start, which saw an approximate 12% gain by late January, the stock had dropped roughly 20% by March amid concerns over AI investment, legal losses, and broader market issues related to the U.S.-Iran conflict. As of mid-May, the stock is down less than 10% year-to-date.
In an effort to counteract rising AI capital expenditure (CapEx), Meta announced layoffs of 8,000 employees, marking about 10% of its workforce. This shift follows a massive employee growth during 2020-2022, which saw the count nearly double to over 86,000. Despite reporting a strong revenue growth of 33% year-over-year, investor confidence remains shaky. Analysts estimate that the layoffs could save the company between $1.5 billion and $3.5 billion annually, which pales in comparison to its projected CapEx of $135 billion for 2026.
As part of its restructuring, Meta plans to reassign 7,000 employees to AI-related roles, bringing the total workforce down to around 71,000. However, CEO Mark Zuckerberg indicated that no additional company-wide layoffs are expected this year, dampening speculation of deeper cuts.
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