Meta Stock: What a 20% Workforce Cut Could Mean for Earnings

TLDR

• Meta is considering layoffs affecting up to 20% of its ~79,000-strong workforce to help offset rising AI infrastructure costs.
• The stock fell 3.83% on Friday when the news broke, then rebounded 3.23% in premarket Monday, trading around $633.
• A 20% cut could save between $5B–$8B annually, according to analyst estimates from JPMorgan and Bank of America.
• The potential cuts would be Meta’s largest since its “year of efficiency” in 2022–2023, which removed over 21,000 jobs.
• No timeline or final decisions have been made; Meta called the Reuters report “speculative.”

Meta is reportedly planning layoffs that could affect more than 20% of its workforce. The move is tied to the company’s push into AI and its need to control costs as it ramps up infrastructure spending.

Reuters broke the story on Friday, citing three people familiar with the matter. The news initially sent the stock down 3.83% on Friday, closing at $613.71. By Monday premarket, the stock had recovered, climbing 3.23% to around $633.

Meta Platforms, Inc., META

Meta employed nearly 79,000 people at the end of 2024. A 20% reduction would mean cutting roughly 15,800 jobs. That would make it the company’s deepest workforce reduction to date.

For context, Meta cut 11,000 jobs in November 2022 — about 13% of its workforce at the time. It followed that with another 10,000 cuts months later. The current round being discussed would exceed both of those in percentage terms.

The backdrop is a massive AI spending commitment. Meta has said it plans to invest $600 billion in data centers by 2028 to support its AI ambitions. CEO Mark Zuckerberg has also been vocal about AI replacing team-level work, saying in January that projects once requiring large teams can now be done by a single person using AI tools.

Meta has also been spending on AI talent. The company has offered pay packages worth hundreds of millions of dollars over four years to recruit top researchers for a new superintelligence team. It has also pursued acquisitions, including a reported plan to spend at least $2 billion to acquire Chinese AI startup Manus.

What the Numbers Could Look Like

Analyst estimates on potential savings vary depending on assumed cost-per-employee.

Bank of America’s Justin Post estimates a 20% reduction could generate $7B–$8B in annual savings, assuming average employee costs of around $500,000. JPMorgan’s Doug Anmuth puts the figure lower, at $5B–$6B, based on a per-employee cost of $300,000–$400,000.

Anmuth noted those savings would still be a relatively small offset against Meta’s rapidly rising expense base. But he added that if $6B in savings were tax-affected against 2027 earnings, it could add roughly $2 in incremental GAAP EPS above his current projection of $31.50.

Meta’s full-year 2026 expense guide currently sits at $162B–$169B. Bank of America does not expect the company to materially revise that guidance based on the layoff reports.

Where the Stock Stands

META’s 52-week range is $479.80 to $796.25. It currently trades well below its peak, with analyst consensus putting the one-year price target at $862.25. The high estimate reaches $1,144.

The company reported trailing twelve-month revenue of around $200.97 billion, net income of $60.46 billion, and a profit margin of 30.08%. It holds $81.59 billion in cash.

The stock trades at a trailing P/E of 26.13 and a forward P/E of 20.58.

Meta’s next earnings date is estimated for April 29, 2026.

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