Meta Faces Dilemma After AI Layoffs: Cybersecurity Incidents Up 40%, Cleanup Time Up 70%

Author: Ariel, Crypto City

Meta's Major Layoffs Lead to AI Operational Challenges

In recent months, social media giant Meta has been laying off employees to develop AI, affecting even the PM Lead for Threads in Taiwan. A follow-up report by Reuters on August 26 revealed that CEO Mark Zuckerberg had proposed an AI transformation plan as early as January this year.

This plan, codenamed Organization Transformation (OT), aims to shift Meta towards an "AI-native" operational model, where AI takes over a significant amount of daily tasks previously performed by employees, retaining only smaller teams with higher talent density for oversight.

Internal planning documents show that Meta executives discussed cutting personnel in multiple teams by as much as 60%, with some employees being reassigned to newly established units, while others may face layoffs, potentially on par with the company's previous layoffs of about 25% of its workforce three years ago.

The restructuring was originally planned to occur in two waves, with the first wave of layoffs in May and the second wave scheduled for November. In addition to direct layoffs, the company planned to reduce headcount through job freezes and the elimination of underperforming employees.

In response, Meta confirmed to Reuters that the OT plan indeed exists, explaining that it is a year-long initiative focused on cost-cutting, restructuring team structures, and reallocating personnel to priority areas such as AI training data generation. However, the company emphasized that it never intended to lay off 60% of its overall workforce and has canceled the second wave of layoffs before deciding on specific numbers.

Meta's Layoffs for AI Also Involve Monitoring Employee Keyboard and Mouse Operations

After news of the layoffs surfaced in March, employee morale was significantly impacted, with some managers even being asked to downplay the situation, merely informing teams that their roles would "evolve" due to AI.

Following reports in April that Meta would lay off about 10% of its workforce on May 20, the company was also revealed to have requested U.S. employees to install monitoring software on their devices to record keyboard and mouse operations, aimed at training AI agents to mimic human computer usage.

This move sparked strong dissatisfaction among employees, with many fearing they were training the AI that would replace them, leading to a flood of complaints on the internal communication platform, Workplace.

Meta's AI Productivity Below Expectations, Security Incidents Up 40%

At the same time, internal data indicated that AI technology has not delivered the expected productivity gains.

According to an internal post by Meta's CTO Andrew Bosworth in June, the use of AI-generated code by employees increased by 220% year-on-year, but the actual new features or upgrades benefiting users only grew by 36%.

Multiple internal posts pointed out that the wave of AI-assisted coding has raised reliability concerns, leading to "large-scale, destructive AI agent behavior," resulting in a 40% increase in significant technical and cybersecurity incidents compared to the same period last year, with employees spending 70% more time on "cleanup" tasks.

In June, hackers breached Meta's newly launched AI customer service robot, gaining access to several high-profile Instagram accounts, including the now-defunct official Obama White House account, bringing these issues to the forefront.

Zuckerberg Calls Off the Second Wave

Faced with overwhelming internal pressure and underwhelming technical performance, Zuckerberg decided on the evening of May 19, just hours before the first wave of layoffs, to cancel the originally planned second wave of restructuring in November after further discussions with executives.

The next day, Meta proceeded with the layoff of 10% of its workforce as scheduled, but Zuckerberg later posted on Workplace to reassure remaining employees that he did not anticipate any further company-wide layoffs this year and hoped to bring more stability to the workforce.

Subsequently, Meta executives attempted to restore employee morale, including encouraging managers to address employee emotions, pausing the mouse monitoring program, allowing some employees reassigned to new AI engineering units to apply to return to their original teams, and sending CFO Susan Li to enhance employee welfare measures.

In early July, Zuckerberg made a rare appearance at an internal town hall, admitting that this organizational restructuring had timing misjudgments and stating that the progress of AI agent technology was not as fast as he had originally expected, but he anticipated that related technologies would yield more benefits in the next 3 to 6 months.

Shifting External Image to "Betting on Talent"

As he scaled back the most controversial internal AI transformation measures, Zuckerberg also launched a public relations campaign, emphasizing that Meta is a people-centric company. This included releasing advertisements focusing on "betting on talent" and a lengthy 6,500-word article outlining his vision for the future of AI.

In that article, Zuckerberg suggested that a future with "abundant job opportunities" might emerge, but he also anticipated that some businesses might shrink due to AI, resulting in an increase in the number of companies but a decrease in workforce size at each company.

However, in his communications with employees, Zuckerberg still carefully used terms like "company-wide" and "this year," leading some employees to speculate that the company might continue to streamline its workforce through targeted layoffs of specific teams or performance-based eliminations, or that company-wide reductions might be postponed until next year.

Currently, Meta plans to invest at least $130 billion in AI chips and infrastructure this year, with market analysis firm LSEG estimating that this expenditure will consume the company's entire operational cash flow for 2026, keeping external observers focused on its subsequent personnel movements.