Meta cuts hundreds of jobs to fund massive AI push as legal troubles mount

2026-03-26 - 15:42

Meta Platforms is reorganizing key divisions and cutting hundreds of jobs across its Reality Labs, sales, and HR teams as it prepares to channel up to $135 billion into artificial intelligence infrastructure this year. Shares of the social media giant have faced recent pressure, trading near $594 and sinking below their 50-day moving average. Investors are currently weighing the high cost of Mark Zuckerberg’s AI ambitions against escalating regulatory headaches. Meta Legal risks have moved directly to the forefront after a California jury found Meta liable for platform designs tied to youth mental health issues. That landmark verdict arrived just days after a New Mexico court ordered the company to pay $375 million over child safety violations. These rulings threaten to force costly operational changes in how Facebook and Instagram drive user engagement, shifting the company’s legal exposure from theoretical risk to an immediate financial penalty. Despite the near-term volatility and cost-cutting, Meta’s leadership is aggressively doubling down on its long-term growth targets. The company just unveiled an unprecedented compensation plan that ties massive stock option payouts for top executives to an audacious $9 trillion market valuation by 2031. Unlocking the highest tier of those payouts would require Meta’s stock to surge past $3,700—a more than 500% increase from current levels. Simultaneously, the tech giant’s expansion of AI externally is encountering geopolitical roadblocks. A planned $2 billion acquisition of the AI startup Manus is now under strict review after Chinese regulators abruptly barred the startup’s founders from leaving the country. The sweeping internal restructuring suggests Meta is actively culling its expansive hardware bets to protect its core advertising margins, even as it attempts to outspend rivals like Google and Microsoft in the race for AI dominance.