On Wednesday, Meta cut approximately 700 jobs across Reality Labs, Facebook, recruiting, and sales. On the same day, the company introduced a new stock option program giving six top executives — including Andrew Bosworth, Chris Cox, and Susan Li — up to $921 million each in stock awards, tied to hitting a $9 trillion market valuation by 2031. Meta's current market cap is roughly $1.5 trillion.
This is the second round of Reality Labs layoffs in 2026. In January, Meta cut more than 1,000 jobs from that division, representing roughly 10 percent of the unit. Those cuts came alongside the closure of several VR studios. The March reductions, smaller in number but broader in scope,extend the same logic. Reality Labs has posted billions in operating losses every quarter for years. The division generated $440 million in revenue in Q1 2024 against a $3.8 billion operating loss. The metaverse bet has cost Meta more than $80 billion since the rebrand from Facebook in 2021, and the returns have not materialized at the scale Zuckerberg projected.
What is replacing that investment is AI infrastructure at a scale that is genuinely difficult to contextualize. Meta has forecast capital expenditure of between $115 billion and $135 billion for 2026, almost entirely directed at data centers, custom AI chips, and AI model development. The company is simultaneously piloting an internal reorganization in which some Reality Labs employees are being rebranded as "AI builders" and organized into small autonomous pods — the theory being that AI-augmented small teams can accomplish what previously required larger groups.
The $9 trillion valuation target for executive compensation is the most revealing number in this story. It implies that Zuckerberg and the board believe the AI pivot will multiply the company's value by roughly six times within five years. That is an extraordinary bet — but it is the same kind of bet Zuckerberg has made before, and the advertising business that funds all of it continues to perform. Meta's AI-driven ad targeting has kept revenue strong even as the platform demographics have shifted and the cultural relevance of Facebook specifically has faded among younger users.
What is harder to reconcile is the human cost running alongside the financial ambition. The 700 people laid off this week are not a rounding error in Meta's operating model, they are people whose careers and livelihoods are being restructured in real time so that a company spending $135 billion on AI infrastructure can move faster. The executives who received those option packages will only realize the gains if the stock hits targets that require the AI bet to pay off. If it does not, the workers already gone still lose. That asymmetry is baked into how large technology companies operate during platform transitions, but it is worth naming plainly rather than obscuring behind language about "streamlining" and "aligning with goals."
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