Meta and Microsoft Reduce Workforce, AI Capital Expenditure Surges 400%
Peter Diamandis noted that Meta is laying off 10% of its workforce, while Microsoft is cutting 7%. Both companies have seen a 400% increase in AI capital expenditure.
Meta plans to cut about 8,000 jobs and eliminate 6,000 vacant positions starting May 20, while Microsoft is launching its first voluntary buyout program for about 7% of its U.S. employees. Both companies are optimizing their workforce to offset massive investments in AI infrastructure.
Market mechanisms indicate that tech giants are shifting funds from labor costs to GPUs, data centers, and AI training clusters on a large scale. AI infrastructure suppliers and chip manufacturers benefit, while traditional software and operations staff face pressure, accelerating the overall tech industry's transition from labor-intensive to capital-technology-intensive models.
Source: Public Information
ABAB AI Insight
Meta has conducted multiple rounds of efficiency layoffs from 2023 to 2025, with this 10% reduction directly linked to AI reinvestment; Microsoft is implementing its first large-scale voluntary buyout, continuing the workforce restructuring under Satya Nadella's cloud and AI-first strategy. Diamandis, a long-time futurist, has repeatedly predicted AI's substitution effect on employment.
In terms of capital pathways, Meta has raised its 2026 capital expenditure guidance to $115-135 billion, primarily directed towards data centers, custom silicon, and Llama model training, while Microsoft is expected to invest $11-12 billion in AI infrastructure during the same period. Both companies are saving labor costs through layoffs to directly offset AI spending, with a strategy to replace human neurons with silicon-based computing power to maintain long-term competitiveness.
Similar cases include the layoffs of traditional IT operations personnel during the cloud computing transformation in the 2010s, while cloud engineers expanded, and the current rounds of AI booms where software companies are trading layoffs for computing budgets; currently, Meta and Microsoft are in a mid-transition phase from labor scale competition to building AI infrastructure barriers.
Essentially, this is a technological substitution: human neuronal labor is being massively replaced by silicon-based AI computing power, driven by the continuous decline in marginal costs of AI training and inference combined with rapid capital scalability, leading to a concentration of pricing power from traditional human skills to tech platforms that possess computing power and models, while accelerating productivity reconstruction and structural employment changes across the industry.