Meta rolls out rich stock options for top executives just hours after 700 layoffs- Moneycontrol.com
Meta has laid off around 700 employees across multiple teams, including its Reality Labs division, in a fresh round of job cuts that coincided with the rollout of a new, highly lucrative stock option program for top executives.
Layoffs hit Reality Labs and other core functions
The job reductions affected employees in Reality Labs—the unit behind virtual reality and metaverse initiatives—as well as staff in recruiting, sales, and teams supporting Facebook. A company spokesperson said teams regularly restructure or implement changes to ensure they are positioned to achieve their goals, signaling an ongoing emphasis on efficiency and focus.
Executive stock options roll out just hours later
Only hours after the layoffs were communicated internally, Meta unveiled a new stock option program aimed at select senior leaders. The scheme could significantly increase compensation for these executives over the next five years, with payouts tied to ambitious long-term performance milestones. One key target would hinge on Meta achieving a market capitalization of $9 trillion by 2031. The company framed the program as a retention tool designed to align leadership incentives with long-term growth priorities. CEO Mark Zuckerberg is not part of the plan. Meta’s current valuation stands at roughly $1.5 trillion.
Scaling back metaverse ambitions
The cuts arrive amid a broader recalibration of the company’s metaverse strategy, including plans to halt some future development related to virtual reality headsets. Reality Labs has been a significant cost center for Meta, with cumulative losses reportedly exceeding $80 billion. This marks the second round of layoffs within the division this year, following about 1,000 roles eliminated in January.
Some impacted employees are being offered alternative roles within the company, though certain moves may require relocation. The latest workforce reductions could be part of a wider, multi-phase restructuring. While there has been speculation that thousands more roles could be eliminated globally, Meta has not confirmed the full scope of potential changes.
AI takes center stage in strategy and spending
Even as Meta trims in some areas, it is accelerating its push into artificial intelligence—particularly in agentic AI systems—through targeted acquisitions and senior hires. The company has acquired startups such as Moltbook and Manus AI and brought on leaders from the AI firm Dreamer to help drive its next growth chapter.
This strategic pivot carries major cost implications. Meta has outlined substantially higher capital expenditures in the coming years, largely to fund AI infrastructure, including new and expanded data centers. Forecasts point to heavy investment through 2026 to support model training, inference at scale, and next-generation platform capabilities.
At the same time, the company has reportedly delayed the launch of an upcoming AI model known internally as “Avocado,” developed by a group referred to as Meta Superintelligence Labs and said to be led by Alexandr Wang, after the system fell short on internal performance benchmarks. The pause suggests a willingness to adjust timelines until technical targets are met.
Balancing efficiency with long-term bets
Meta’s latest moves underscore a dual-track strategy: streamline operations and costs in legacy or underperforming areas while doubling down on long-horizon bets in AI. The leadership incentive program aims to tie executive rewards to durable value creation, even as the company pulls back on certain metaverse projects and reorganizes teams.
For employees, the restructuring brings uncertainty but also the possibility of redeployment to growth areas. For investors, the message is one of sharper focus: near-term discipline paired with sizable, ongoing investment in infrastructure and talent to support AI-driven products and services. How effectively Meta manages that balance—especially amid ambitious performance targets—will define its trajectory in the years ahead.
