Meta’s AI Push is Driving Layoffs

Earlier this week Meta (Nasdaq: META) announced its first quarter results that outpaced the market. But disappointing usage metrics sent the stock down 7% in the after-hours trading session.

Meta’s Financials

Meta’s first quarter revenues grew 33% to $56.3 billion, ahead of the Street’s expected $55.5 billion. EPS of $7.31 was ahead of the market’s estimate of $6.79.

Advertising revenues grew 33% to $55 billion. Revenue from family of apps grew 74% to $885 million driven by WhatsApp paid messaging and subscriptions.

Reality Labs revenues were down 2% to $402 million due to lower Quest headset sales.

While the financials were impressive, the market was not pleased with the declining usage metrics. Daily active people grew 4% over the year to 3.56 billion, falling short of the analyst expectations of 3.62 billion. Meta attributed the lower-than-expected usage to the internet restriction on access to WhatsApp in Russia and Iran.

For the current quarter, Meta expects revenues of $58-$61 billion, compared with analyst estimates of $59.5 billion. For the year, it increased its capex spending estimate to $125-$145 billion, compared with an earlier estimate of $115-$135 billion. The increased capex expectation was driven more by the higher component pricing this year than by additional costs to support future capacity. Meta is also worried about the increased regulatory concerns across the globe.

Meta’s stock is trading at $669.12 with a market capitalization of $1.5 trillion. It hit a 52-week high of $796.25 in August and has climbed from the 52-week low of $520.26 that it had fallen to in April.

Meta’s AI Model

Earlier this month, Meta released Muse Spark, the first LLM built by its Superintelligence Labs. Muse Spark is the first model in its new Muse series which is a deliberate and scientific approach to model scaling where each generation validates and builds on the last. The initial model is small and is a foundation model being used for the next generation which is already in development. Muse Spark powers the Meta AI assistant in the Meta AI app and meta.ai and is built to support complex reasoning and multimodal tasks. Muse Spark allows users to switch between modes depending on the task.

Meta AI can launch multiple subagents in parallel to address user questions. For instance, a user can leverage AI to plan a family trip where one agent will simultaneously draft the itinerary, another will compare prices and a third will find the activities, giving the user a more consolidated and a faster answer. Muse Spark also allows Meta AI to improve health navigation by providing more detailed responses, including questions involving images and charts. Meta is also opening access to the technology. It will be available in private preview via API to select partners, and Meta is planning for open-source future versions of the model.

Layoffs at Meta

Meta ended the quarter with headcount rising 1% over the year to nearly 78,000. But Meta, like other tech players, continues to rationalize headcount to “offset the other investments we’re making.” Earlier this month, it announced plans to lay off 10% of its workers, and it removed 6,000 open roles.

As of April 2026, the global tech industry has recorded 78,557 layoffs, with 76.7% occurring in U.S. companies. While giants like Oracle (25,000+), Amazon (16,000), and Block (4,000) lead the charge, a disturbing pattern has emerged.

According to research by Alan Cohen (RationalFX), nearly half of these job losses are now explicitly tied to “AI Restructuring.” However, a deeper analysis suggests that AI is often being used as an “AI-as-an-excuse” narrative to justify aggressive cost-cutting and boost sagging stock prices. Companies like Oracle have automated the termination process itself, firing thousands via 6:00 AM emails—a cold-blooded approach that reflects a total deficit of empathy and human kindness.

The 1Mby1M Perspective: Stop Being the Victim

There is only one permanent solution to this trend of mass layoffs and “AI-driven” displacement: Learn to become an entrepreneur. You don’t have to build a “Unicorn.” You just need to solve a real problem, build a sustainable business, and create your own livelihood. This tsunami of layoffs will continue; paralysis is not a solution. If you have been laid off: Now is the time to pivot your skills toward a venture you own.

If you still have a job: Now is the perfect time to consider bootstrapping a startup with a paycheck before the next 6:00 AM email arrives.

Take Action Now

• For the Displaced: Equity-Free Accelerator for Laid-Off Techies | 1Mby1M
• For the Part-Time Founder Hedging Against Layoffs: Bootstrap with a Paycheck through 1Mby1M
• Free Mentoring: Join our Free Mentoring Roundtables for Startup Founders to get direct feedback on your idea.
• Rapid Validation: Use the 1Mby1M AI Mentor to stress-test your business model 24/7.

Master the Strategy: Enroll in the Udemy AI Mentor Prompt Course to learn how to use AI to build—not replace—your future.

About 1Mby1M:

One Million by One Million (1Mby1M) is the first global virtual accelerator in the world, founded in 2010 by Silicon Valley serial Entrepreneur Sramana Mitra. It offers a fully online entrepreneurship incubation, acceleration and education resource for solo entrepreneurs; and bootstrapped founders working on tech and tech-enabled services ventures.

1Mby1M does not charge equity, offers an AI Mentor available 24/7 in 57 languages, and offers a compelling alternative to Y Combinator and other equity accelerators.

Photo Credit: LPS.1, CC0,

Disclosure: All investors should make their own assessments based on their own research, informed interpretations, and risk appetite. This article expresses my own opinions based on my own research of product-market fit, channel execution, and other factors. My primary interest is in product strategy. While this may have bearing on stock movements, my writings tend to focus on long-term implications. The information presented is illustrative and educational, but should not be regarded as a complete analysis nor recommendation to buy or sell the securities mentioned herein. I am not a registered investment adviser and I am not receiving compensation for this article. I am an investor in this company.