Meta Stock Rises 0.6% as Layoffs Begin in AI Restructuring Amid Strong Q1 Results

NEW YORK — Meta Platforms Inc. (NASDAQ: META) shares gained modestly in midday trading Wednesday, climbing about 0.58% to $606.08 as the company proceeded with a major workforce restructuring involving roughly 8,000 job cuts tied to its push into artificial intelligence.

The stock traded at $606.08, up $3.47, as of approximately 11:44 a.m. EDT on May 20, 2026, with trading volume in line with recent averages. The move came as Meta began notifying employees of layoffs starting in Asia and rolling out in other regions, part of a broader efficiency drive.

Meta reported strong first-quarter results on April 29. Revenue reached $56.31 billion, up 33% from $42.31 billion a year earlier. Net income rose 61% to $26.77 billion, or $10.44 per diluted share, from $16.64 billion, or $6.43 per share. The earnings included an $8.03 billion one-time income tax benefit.

Excluding the tax benefit, adjusted earnings per share stood at approximately $7.31. Operating income increased 30% to $22.87 billion, maintaining a 41% operating margin. Ad impressions grew 19% year-over-year, while average price per ad rose 12%.

Family daily active people averaged 3.56 billion in March 2026, up 4% year-over-year. Headcount stood at 77,986 as of March 31, up 1% from the prior year.

Mark Zuckerberg, Meta founder and CEO, said in the earnings release: “We had a milestone quarter with strong momentum across our apps and the release of our first model from Meta Superintelligence Labs. We’re on track to deliver personal superintelligence to billions of people.”

The company raised its full-year 2026 capital expenditures forecast to $125 billion to $145 billion from a prior range of $115 billion to $135 billion, citing higher component pricing and additional data center costs for AI infrastructure. It guided second-quarter revenue between $58 billion and $61 billion.

Meta announced plans in April for the layoffs, targeting about 10% of its global workforce, or roughly 8,000 positions. Notifications began Wednesday, starting with employees in Singapore at around 4 a.m. local time, followed by other regions. The company also scrapped plans to fill about 6,000 open roles.

In an internal memo shared with employees on May 18, Meta Chief People Officer Janelle Gale detailed additional changes, including reassigning about 7,000 staff to new AI-focused initiatives and eliminating layers of management to create flatter organizational structures. The restructuring affects around 20% of staff when including transfers.

The layoffs and reassignments aim to improve efficiency and redirect resources toward AI development as the company invests heavily in infrastructure. Meta has projected continued strong operating income growth for 2026 despite elevated spending.

Cash, cash equivalents and marketable securities totaled $81.18 billion at the end of the first quarter. Free cash flow for the period was $12.39 billion. The company paid $1.35 billion in dividends and dividend equivalents.

Meta maintains a quarterly dividend of $0.525 per share, equating to an annual yield of about 0.35% at recent prices. It has returned capital through dividends and share repurchases in prior periods.

The stock has traded in a 52-week range of $520.26 to $796.25. Market capitalization stands near $1.53 trillion. Analysts have offered varied price targets, with some forecasting potential upside toward $1,000 by year-end based on AI-driven growth.

Meta faces ongoing legal and regulatory matters, including scrutiny over youth safety on its platforms. The company warned in its earnings release that such issues “could significantly impact our business and financial results” and noted potential material losses from upcoming U.S. trials.

The company operates Facebook, Instagram, WhatsApp and Messenger, with a heavy emphasis on AI enhancements for content recommendation, ad targeting and new experiences. It has released models through Meta Superintelligence Labs and continues work on AI agents and infrastructure.

Industry-wide, major tech firms have adjusted workforces amid AI investments. Meta’s changes include shifting employees to teams focused on applied AI engineering and agent development. Severance packages for laid-off workers include at least 16 weeks of pay plus additional benefits.

Shares reacted negatively after the April earnings release due to the raised capex outlook but have shown resilience in recent sessions amid broader market conditions. The stock closed at $602.61 on May 19, down 1.41% for that session.

Meta expects full-year 2026 total expenses between $162 billion and $169 billion, unchanged from prior guidance. It anticipates its tax rate for remaining quarters at 13% to 16%, absent changes in the tax landscape.

The next earnings report is scheduled for late July. Investors continue to monitor user engagement metrics, ad revenue trends and progress on AI monetization amid competition from other tech giants.

Meta’s balance sheet remains strong, supporting ongoing investments while returning capital to shareholders. The company employed about 78,000 people at the end of 2025 before the current round of changes.

Broader market factors, including interest rates and sector rotation, have influenced trading in recent weeks. Meta has outperformed some peers in advertising revenue growth despite macroeconomic pressures.

The restructuring underscores Meta’s commitment to becoming an AI-first company, with CEO Zuckerberg emphasizing long-term bets on superintelligence and efficiency gains from AI tools.