Meta and xAI cut jobs as AI investment reshapes global tech workforce

The rapid expansion of artificial intelligence is beginning to reshape the global technology workforce, prompting some of the world’s biggest tech companies to rethink hiring, spending and product development. 

Fresh restructuring at Meta Platforms and xAI shows how heavy investment in AI is now influencing staffing decisions across Silicon Valley and the wider tech sector. 

Companies are pouring billions of dollars into AI models, data centers and specialized computing infrastructure.

At the same time, executives are under pressure to control costs and deliver products that can compete in the fast-growing generative AI market. 

That balancing act is leading companies to shift resources toward engineering teams and research while reducing roles in other areas.

The changes highlight how the rise of AI is starting to alter how technology firms structure their workforce. 

Two of the industry’s most closely watched leaders — Elon Musk and Mark Zuckerberg — are at the center of the latest changes as their companies push deeper into artificial intelligence.

Leadership changes at xAI 

At Musk’s startup xAI, leadership shifts have followed concerns about the performance of the company’s coding division. 

Co-founders Zihang Dai and Guodong Zhang have recently left the company, leaving only two of the startup’s original 11 founders still involved. 

Musk has also brought in specialists from SpaceX and Tesla to review engineering work and improve development standards. 

Part of the focus has been on Grok, the company’s coding assistant, which has struggled to attract users.

Engineers have cited issues with training data and slow performance, while Musk has referred internally to problems linked to what he called “vibe coding.” 

The product has also faced stiff competition from AI coding tools such as OpenAI Codex developed by OpenAI and Claude Code from Anthropic, which have gained more traction with developers and corporate clients.

Meta plans deeper job cuts 

Meanwhile, Meta is preparing a new round of layoffs as the company increases spending on AI infrastructure. 

The company could cut up to 20 percent of its workforce of nearly 79,000 employees. If confirmed, the move would mark Meta’s largest workforce reduction since its 2022–2023 cost-cutting drive. 

Zuckerberg has placed generative AI at the center of Meta’s long-term plans, offering large compensation packages to attract top researchers and engineers.

Still, challenges remain as the company works to scale its next generation of models, including Llama 4.

A wider shift across the tech industry 

The changes at Meta and xAI reflect a broader pattern across the technology sector. 

Companies including Amazon and financial technology firm Block have also cut thousands of jobs while expanding AI-related spending. 

Industry analysts say the adjustments point to a new phase for the tech workforce, where companies rely more on AI tools and smaller teams of highly specialized engineers to build and maintain advanced systems.