Meta pulls plug on AI‑driven restructuring, halts second wave of layoffs

Key Points

• Meta cancels the planned November wave of layoffs tied to its AI restructuring plan, Project OT.
• The original plan targeted up to 60% cuts in certain teams, shrinking middle management and expanding AI‑assisted roles.
• AI code changes rose 220% YoY, but new user‑facing features increased only 36%, while technical incidents grew 40%.
• Employee monitoring software that logged mouse movements and keystrokes led to a 19‑point drop in sentiment scores.
• Zuckerberg acknowledged in a July town hall that AI progress had been overestimated.
• Meta maintains that broader AI initiatives will continue, with smaller AI‑assisted teams still active.
• Investors remain focused on when the heavy AI spending will translate into concrete product gains.