Growth firms do not cut jobs. So, when the media reported rumors that Meta Platforms (META) would cut 20% or more of its total staff, it was a red flag for the AI sector.
Meta might follow Amazon’s (AMZN) playbook. Amazon cut 16,000 jobs as of March 26. IT already cut 14,000 staff last October 2025. That totaled 30,000. Amazon cut office staff to lower operating costs. It wanted to eliminate bureaucracy and shift towards AI projects.
In 2026, Amazon will spend $200 billion. This is even though AI has yet to prove it has a positive return on investment.
Meta might need to repeat its massive job cut at a size not seen since late 2023. Labelled the “year of efficiency,” Meta cut 11,000 staff (13% of the total). It cut another 10,000 jobs after the first round.
This time, Meta is spending $600 billion by 2028 to fund its data center. The firm, along with other members of the Magnificent 7, no longer rally after announcing heavy AI-related spending. Microsoft (MSFT) peaked at $555.45 in 2025 but is now down ~ 29% from that level. It gained just 4.4% in the last year.
Tesla (TSLA) is in a solid downtrend that started in late December 2025. Its core EV business is weak, while AI does not contribute to its business growth.
Alphabet (GOOG) is down 3.9% YTD. Still, the 83% gain in the last year suggests that Gemini AI is the winning chatbot service.
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