Meta is having a terrible, no good, very bad week.
For the second time this year, the company on Wednesday laid off about 700 employees, hours before it was found liable for the mental health struggles of a young woman who became addicted to its platforms as a child. The Los Angeles jury also found YouTube to be negligent.
The affected employees work in several different organizations within the company, including Facebook, global operations, recruiting, sales, and Reality Labs, its virtual reality division, CNBC reported. Some are being offered new roles within the company, but other positions may require relocation. In addition to Facebook, Meta also owns Instagram and WhatsApp.
“Teams across Meta regularly restructure or implement changes to ensure they’re in the best position to achieve their goals. Where possible, we are finding other opportunities for employees whose positions may be impacted,” a Meta spokesperson said in a statement.
Layoffs follow new stock options for executives
Meanwhile, less than a day earlier, the company rolled out a new stock program for six key executives that could increase compensation for some of them upwards of $921 million each over the next five years, The New York Times reported.
Meta said the move was a way to retain talent in the AI era and help it meet its AI goals. As generative AI and AI agents increasingly become a focus for companies, Meta has also been hiring people with related skill sets.
“This is a big bet,” a Meta spokesperson said in a statement. “These pay packages will not be realized unless Meta achieves massive future success, benefiting all of our shareholders.”
The layoffs are the latest among tech giants, including Amazon, Apple, Microsoft, and Google, as they refocus their priorities on AI.
In January, Meta laid off employees in its Reality Labs division and shuttered several studios that were working on VR titles. Those cuts, which affected more than 1,000 jobs and impacted about 10% of that unit, centered on VR initiatives, including its Quest headset business and internal development tied to the Horizon Worlds virtual social network.
Meta, Alphabet, Amazon, and Microsoft are expected to spend a combined $650 billion on AI this year. Meta has estimated that its share of that figure will be at least $115 billion in 2026, mainly for AI initiatives and to build new data centers to power the technology.
More legal woes
Before the Los Angeles verdict, in a separate case, a New Mexico jury ruled Tuesday that Meta violated state law following a suit accusing it of failing to warn users about the dangers of its platforms and protect children from sexual predators.
The jury found Meta liable on all counts, including for willfully engaging in “unfair and deceptive” and “unconscionable” trade practices, and ordered the company to pay $375 million in damages.
Meta said it will appeal the decision.
The Los Angeles jury ordered Meta to pay $4.2 million in combined compensatory and punitive damages, and YouTube to pay $1.8 million.
Also read: Meta’s AI spending is extending far beyond layoffs, with a $27 billion infrastructure deal showing how aggressively the company is building out long-term compute capacity.