Key Takeaways
- Meta initiated a confidential initiative called “Project OT” designed to slash certain departments by as much as 60% across two phases, transitioning toward an “AI native” organization
- Hours before the initial May 20 layoffs commenced, Zuckerberg canceled the planned second round following intense employee opposition
- The company’s AI agent systems underperformed expectations, with critical incidents jumping 40% and failing to generate anticipated efficiency improvements
- Meta ultimately reduced its workforce by 10% in May, with Zuckerberg publicly stating no additional company-wide reductions would occur in 2025
- The tech giant intends to allocate a minimum of $130 billion toward AI infrastructure throughout 2026, an amount analysts project will equal its entire operational cash flow
Meta Platforms (META) embarked on an ambitious strategy to dramatically reduce its human workforce through artificial intelligence implementation. The outcome was far from what leadership envisioned.
A Reuters investigation published Tuesday uncovered that Meta covertly designed “Project OT,” an abbreviation for Organization Transformation, representing a comprehensive internal reorganization strategy conceived at Zuckerberg’s Hawaiian estate during January. The initiative’s objective centered on transforming Meta into an “AI native” enterprise, where artificial intelligence agents would assume substantial portions of work presently performed by human employees.
During scenario modeling sessions, company leadership examined possibilities involving workforce reductions reaching 60% in certain divisions. The transformation strategy included two distinct phases: an initial layoff round scheduled for May followed by a subsequent round in November. An HR executive’s internal assessment indicated total reductions might match or surpass the 25% workforce decrease Meta implemented three years earlier.
The Strategy Crumbles
During the evening of May 19, mere hours ahead of the scheduled first phase implementation, Zuckerberg reversed course on the November reduction plans. Meta proceeded with the May 20 workforce cuts, eliminating 10% of staff. The more extensive reductions, however, never materialized.
Worker resistance proved significant. Employees saturated Meta’s internal discussion forums with grievances. The company’s half-year Pulse survey revealed internal sentiment ratings plummeted from 74% positive to 55% positive. Certain engineering divisions experienced headcount declines approaching 30% by May’s conclusion, Reuters documented.
Meta additionally implemented monitoring software on U.S.-based employee computers to record keystrokes and cursor movements for AI algorithm training purposes. Numerous workers interpreted this as directly training their digital successors. Labor union organization efforts strengthened in response.
The underlying technology similarly failed to meet benchmarks. While code production surged 220% annually, new functionalities delivered to end users expanded merely 36%. Significant technical and security breaches escalated 40%, while employee hours devoted to addressing these problems increased 70%.
During early June, cybercriminals leveraged Meta’s AI-enhanced customer service system to compromise prominent Instagram profiles. Meta refused to provide statements regarding the internal disruption metrics.
Zuckerberg’s Response
During an internal company meeting in early July, Zuckerberg conceded the implementation schedule had experienced delays. The AI agent capabilities, he explained, had not advanced as rapidly as he initially projected. He informed staff members he anticipated meaningful progress within the following three to six months.
Following May’s workforce reductions, Zuckerberg distributed a company memorandum stating he did “not expect other company-wide layoffs this year.” Leadership subsequently suspended the keystroke monitoring initiative, permitted certain employees to return to their previous assignments, and committed to enhanced workplace amenities.
Meta acknowledged Project OT’s reality when responding to Reuters’ reporting, characterizing it as a year-long initiative concentrated on expense reduction, organizational redesign, and personnel reallocation toward strategic priorities. Company representatives clarified that eliminating 60% of the complete workforce was never the intention and that multiple major business units remained excluded from the planning scenarios.
Meta’s artificial intelligence expenditures continue attracting investor attention. The organization plans to dedicate at least $130 billion toward AI processors and supporting infrastructure during 2026. LSEG analysts calculate this investment will absorb Meta’s complete operating cash generation for that year.
META stock was trading near $714 at the time of reporting.
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