Meta CEO Mark Zuckerberg called off a major workforce restructuring plan just hours before its implementation, according to internal company documents reviewed by Reuters. The plan, code-named Project OT - short for Organization Transformation, envisioned transforming Meta into an "AI native" company by slashing team sizes by up to 60 percent across the organization. The restructuring was planned in two waves, with the first purge scheduled for May and a second wave for November, but Zuckerberg abandoned the November cuts after employee resistance. In scenario-planning exercises, executives explored slashing the size of many teams across Meta by as much as 60 percent, with some employees offered roles in new units while others would have been laid off as part of a culling that one human-resources executive projected would be as big as or bigger than the company's cuts of around 25 percent three years ago. According to internal documents, high-level executives hunkered down and opted not to discuss the article with rank-and-file employees, instead quietly dismissing it to senior managers and instructing them to tell their teams they should expect roles to "evolve" as a result of AI. The plan's collapse came at the eleventh hour on the night of May 19, just hours before the first wave of layoffs was set to begin, with Zuckerberg subsequently telling remaining employees he did "not expect other company-wide layoffs this year."
Meta employees were in open revolt against the AI transformation plans, convinced that the company's AI initiatives were partly aimed at replacing human workers, as reported by Reuters. Internal data suggested that the autonomous AI "agent" technology at the heart of the strategy was failing to deliver hoped-for productivity gains. Some investors were questioning what Meta had to show for its gargantuan spending on AI. The company's internal measure of employee sentiment dropped from 74% favorable to 55% favorable according to the company's half-year Pulse survey. Staff morale sank as employees' use of AI resulted in a vast increase in code generation, with code changes to internal software platforms up 220% year-over-year, but changes leading to new features reaching Meta users were only up 36%. As early as March, infrastructure teams warned of "reliability warning signs" caused by the AI coding surge, and in April, unchecked AI agents were performing "large-scale, disruptive actions that humans are unlikely to execute." The public saw a glimpse of these problems in early June after hackers exploited Meta's new AI-powered customer support bot to gain access to high-profile Instagram accounts, including one for the dormant Obama White House page. Believing they might be training their own AI replacements, and irate over the lack of detail about the layoffs, many employees flooded Meta's in-house communications network with angry screeds and gallows humor. Criticism of Meta's approach reportedly increased across internal communication channels, adding to concerns about employee morale.
According to internal planning documents reviewed by Reuters and three people familiar with the project, the restructuring would have been carried out in two waves, beginning with a first purge in May and followed by another shake-up in November. Some employees would have been offered roles in new units, while others would have been laid off as part of a culling that one human-resources executive projected would be as big as or bigger than the company's cuts of around 25 percent three years ago. The plan also included closing open positions and pushing out poor performers. Between the reassignments and the job cuts, headcount in some engineering units dropped as much as 30% by the end of May, according to one document and people familiar with the planning. Some engineers were reassigned to a new Applied AI Engineering unit tasked with creating software-engineering puzzles to be used as training data to improve the coding skills of Meta's AI models, though many staffers derided the work as rote and boring in internal posts. Meta confirmed the plan was to be carried out in two waves and that the most drastic scenarios involved reducing team sizes by up to 60 percent, but declined to specify which units were involved and said several major ones weren't part of it. The company proceeded with a 10% workforce reduction the following day after abandoning the more sweeping restructuring. The plans were discussed at Meta's leadership retreat in Hawaii earlier this year, with internal scenarios considering cuts of up to 60% in some teams, though these figures represented different planning possibilities involving layoffs, redeployment and unfilled positions, rather than a proposed company-wide workforce reduction.
The AI transformation plans were plagued by significant technical and security problems that ultimately contributed to their abandonment. Major technical and security incidents, such as service disruptions and possible data leaks, spiked 40% from the previous year, with the time staffers had to spend "firefighting" them up 70%. The public saw a glimpse of these problems in early June after hackers exploited Meta's new AI-powered customer support bot to gain access to high-profile Instagram accounts, including one for the dormant Obama White House page. Infrastructure teams were warning of "reliability warning signs" caused by the AI coding surge as early as March, and another post in April said that unchecked AI agents were performing "large-scale, disruptive actions that humans are unlikely to execute." Meta had also mandated that tracking software be installed on U.S. employees' devices to capture their keystrokes and mouse clicks to teach its AI agents to replicate how humans interact with computers. AI-assisted coding helped increase software output, but engineers were required to spend time addressing problems, raising questions about whether the increase in output was translating into genuine efficiency. Meta declined to comment on the internal data about the AI disruptions.
Meta confirmed to Reuters the existence of Project OT, describing it as a year-long project focused on cost-cutting, redesigning team structures and shifting staff into new priority areas such as producing training data for AI models. The company acknowledged the plan was to be carried out in two waves and that the most drastic scenarios involved reducing team sizes by up to 60 percent. Meta stated that company leaders canceled plans for the second wave before determining how many people overall would lose their jobs, and that it never intended to lay off 60 percent of its entire workforce. "As part of our company restructuring earlier this year, we asked some teams to conduct a scenario planning exercise looking at the potential impact of redeployments, open role closures and cuts," Meta said in a statement. "This ultimately resulted in moving thousands of employees to do priority work on several newly-established teams, as has been publicly reported. Ultimately, we didn't move forward with every scenario from the exercise - and it was never assumed we would." Meta told Reuters that the company is beginning to see progress with its redeployments, noting that data produced by the Applied AI Engineering unit helped train an AI model it released last month. Despite scaling back parts of Project OT, Meta remains committed to its broader AI strategy. Chief Executive Mark Zuckerberg has continued to invest heavily in AI infrastructure and talent as the company works to make artificial intelligence a bigger part of its operations. In early July, Zuckerberg made a surprise appearance at an internal town hall and conceded miscalculations on the reorganization's timing, saying AI agent technology had not "accelerated" as quickly as he had anticipated. He added that he expected the tech to accelerate in the future. The company's message subsequently shifted towards using AI to empower employees rather than simply eliminate their jobs, with Meta even launching a public campaign around the idea that it was "betting on people."
