The math alone is striking. Even at a 20% headcount reduction, Shmulik estimates Meta could realize $2 billion to $4 billion in cost savings this year and $5 billion to $8 billion in 2027 — translating to 3%–5% EPS upside in 2026 and 4%–7% in 2027. But he was quick to note the savings are more likely to be redeployed into AI infrastructure than returned to shareholders. Meta is already planning to spend $600 billion on data centers by 2028 and recently acquired AI startup Manus for at least $2 billion.
What makes the moment significant isn’t the scale of the cuts, but the context. Less than three weeks ago, Jack Dorsey laid off nearly half of Block’s 4,000-person workforce and made a blunt prediction to investors: within a year, most companies would reach the same conclusion. He didn’t have to wait the whole year.
The central question Shmulik raises — and leaves open — is whether these cuts are genuinely AI-driven or whether AI is providing convenient cover for belt-tightening that would have happened anyway. “Fat exists in every organization,” he wrote, “but it’s usually not as clean as being concentrated in specific teams or individuals.”
“This is speculative reporting about theoretical approaches,” a Meta spokesperson told Fortune. That theoretical approach, of course, could set off a cascade of cuts.
