Layoffs and Lawsuits Collide in Meta’s Worst Week Yet

Meta endured a devastating series of events this week, marked by significant workforce reductions and serious legal setbacks. The company laid off around 700 employees from various teams, including Facebook, global operations, and its Reality Labs VR division. This restructuring follows earlier cuts in January that affected over 1,000 jobs. Strikingly, these layoffs occurred just hours after a Los Angeles jury held Meta liable for the mental health struggles of a young woman who became addicted to its platforms as a child, ordering the company to pay $4.2 million in damages. In a separate New Mexico case, Meta was also found liable for failing to protect children from sexual predators, resulting in a $375 million judgment.

The internal optics worsened as reports revealed Meta had just rolled out a new stock compensation program for six key executives. This plan could increase their compensation by up to $921 million each over five years, a move the company defended as necessary to retain top AI talent. This stark contrast between executive rewards and employee layoffs underscores Meta's intense strategic refocus. The company, alongside peers like Alphabet and Microsoft, is channeling massive resources—an estimated $115 billion by 2026—into AI infrastructure and data centers, leading to a painful reorganization of its workforce and mounting public and legal scrutiny over its platform's societal impact.