Two of the world’s largest technology companies have announced sweeping workforce reductions as artificial intelligence (AI) investment continues to reshape the sector.
Meta, the parent company of Instagram and WhatsApp, confirmed it would eliminate approximately 8,000 positions, representing roughly a tenth of its global workforce.
Microsoft simultaneously revealed plans for a voluntary redundancy scheme affecting some 8,750 employees within its American operations, equivalent to seven per cent of total staff.
Both firms are redirecting resources towards AI development, with Meta having previously signalled expenditure exceeding $160billion (£120billion) this year alone.
The announcements come days after former prime minister Rishi Sunak cautioned that AI is already diminishing employment prospects for young Britons entering the workforce.
Meta’s decision to shed staff comes alongside a freeze on approximately 6,000 vacant positions that will now remain unfilled.
The company faces mounting costs for data centres required to power its AI ambitions, while simultaneously competing to recruit specialists in the field.
Last year, Meta’s spending reached just under $120billion (£90billion), with this year’s outlay projected to climb substantially higher.
‘Flat is the new up’: Rishi Sunak warns AI is stalling youth hiring as Meta and Microsoft cut thousands of jobs
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Microsoft’s voluntary departure programme is expected to commence early next month, according to reports from CNBC.
The company’s chief people officer, Amy Coleman, informed employees of the scheme via internal correspondence.
“Our hope is that this program gives those eligible the choice to take that next step on their own terms, with generous company support,” she said.
These cuts continue a pattern of workforce reductions across major American technology firms in recent years.
Satya Nadella is the Chief Executive Officer of Microsoft
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Speaking to the BBC earlier this week, Mr Sunak warned Ai is already suppressing job opportunities for graduates seeking entry-level positions.
The former chancellor, who now advises both Microsoft and Anthropic, said business leaders were privately acknowledging youth recruitment is stalling due to the technology.
“Flat is the new up,” he said, describing how companies believe they can expand without significantly growing their headcount.
Mr Sunak said bosses are recognising how AI deployment allows them to maintain business growth while keeping employment levels static.
“There are reasons to be worried and think about the future. But we are able to do something about this,” he said.
The Conservative MP urged a serious examination of the issue.
Mr Sunak proposed abolishing National Insurance (NI) over time, replacing the revenue with levies on corporate profits that would be enhanced by AI-driven productivity gains.
He acknowledged young people face increasing difficulty securing positions in service industries, including law, accountancy and creative fields.
Many experts predict AI will force a huge shift in the global economy
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He told BBC Newsnight governments should consider how to encourage AI being deployed to assist workers rather than supplant them entirely.
“We should be thinking about, well, how do we tip the balance in favour of AI being used in that positive way to help people do their jobs better (rather than replacing them),” he said.
Mr Sunak was appointed as an adviser to both Anthropic and Microsoft last year while also holding a senior role at Goldman Sachs.