00:00Meta just cut 8,000 jobs and said AI is the reason why.
00:04But the real reason is something these companies aren't saying out loud.
00:08Here's what's happening.
00:09Meta is nearly doubling its spending this year,
00:11and almost all of it is going toward building their own AI.
00:15When they announced the cuts, they were straightforward about it.
00:18The memo they sent out said this was, quote,
00:20a continued effort to run the company more efficiently
00:22and allow us to offset the other investments we're making.
00:25Every major tech company is running the same play.
00:27Amazon, Microsoft, Google, all cutting jobs, all citing AI,
00:31all spending record amounts of money at the same time.
00:34But according to 24-7 Wall Street,
00:36even if Meta fired every person who works there,
00:39it still doesn't cover the cost for what they're building.
00:41So if the savings aren't really funding the technology, what are they for?
00:45Zuckerberg said it himself at a company town hall.
00:47Meta has two cost centers, infrastructure and people.
00:51These jobs aren't being replaced by AI.
00:54They're being cleared out to make room for what owning it will cost.
00:57And starting in 2027, maintaining what they're building will cost nearly as much
01:02every year as their entire workforce does right now.
01:06The layoffs are just a down payment.
01:08To put it more plainly, Harvard researchers found that most of these layoffs
01:11are based on what companies expect AI to do, not what AI is currently doing.
01:17Goldman Sachs says that despite all the spending,
01:19AI has contributed basically nothing to US economic growth so far.
01:23And Bloomberg found that roughly half of these cuts get quietly rehired at lower wages overseas,
01:29which means for a lot of these workers, this isn't even really an AI story at all.
01:33It's just a pay cut with a different name.
01:35Supporters say the window to break into this tech is narrow and the stakes are permanent.
01:39Amazon CEO Andy Jassy put it plainly in a letter to shareholders,
01:43quote, we're not investing approximately $200 billion in CAPEX in 2026 on a hunch.
01:49The argument is that sitting this one out really isn't an option
01:52and that the workers who lost their jobs are the price for staying in the race.
01:56So is this the moment tech finally delivers on every promise it's ever made?
02:00Or is this just a really expensive way to fire people?
02:03Let us know in the comments and follow us here for more.
Comments