Meta announced on Friday that it will not move forward with the second wave of layoffs tied to its AI‑centric restructuring plan, Project OT. The move marks a sharp reversal from a January leadership retreat where executives outlined an "AI native" vision that would shrink middle‑management layers, convert specialists into general‑purpose "builder" roles and rely on AI agents to set daily priorities.
Under the original blueprint, some teams faced headcount reductions of up to 60 percent, with a mix of firings, elimination of open positions and the removal of workers deemed lower‑performing. The plan also called for a second round of cuts in November, a timeline that CEO Mark Zuckerberg ultimately put on hold.
Reuters reports that the shift in course stems from a combination of underwhelming AI performance and growing employee unrest. Meta’s internal data shows a 220 percent year‑over‑year increase in code changes to its AI platforms, yet new features reaching users rose only 36 percent. Meanwhile, technical and security incidents climbed 40 percent and the time staff spent addressing them jumped 70 percent.
In a July town‑hall, Zuckerberg admitted the company had overestimated the speed of AI progress, saying the "trajectory of the agentic development" had not accelerated as expected and that the AI investments had not yet "come to fruition."
Employee sentiment took a hit after the firm installed software that captured mouse movements and keystrokes to train future AI agents. The monitoring sparked a wave of complaints, drove sentiment scores down 19 points and fueled labor‑organizing activity across the organization.
While the broader AI agenda remains on the table, Meta clarified that no company‑wide cuts will occur this year. The firm continues to deploy smaller AI‑assisted teams in select divisions and is pouring money into AI infrastructure, a point that keeps investors watching for tangible returns.
Analysts note that the aborted second wave does not signal the end of Meta’s AI ambitions, but it does underscore the challenges of marrying ambitious technology goals with workforce realities. As the company recalibrates, employees and shareholders alike will be looking for evidence that the remaining AI initiatives can deliver measurable value without further disruption.
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