On March 25, Meta notified about 700 employees to leave, involving five departments including Reality Labs, Facebook Social Media, Recruiting, Sales, etc. On the same day, the SEC disclosed an executive stock option plan, where 6 key executives will receive stock options tied to a $9 trillion market value. This is the first time Meta has granted options to executives since its 2012 IPO.
While downsizing on one side, Meta rolled out the most aggressive executive incentive plan in Silicon Valley history. What Meta did on the same day is not contradictory, but two sides of the same strategic coin. The AI race doesn't need more people; it needs more expensive people and more machines.
Fewer People, Each More "Valuable"
2022 was the peak year for Meta's workforce, with a total of 86,482 employees. In that year, Zuckerberg doubled down on the metaverse, aggressively hiring, only to see the annual revenue drop from $117.9 billion the previous year to $116.6 billion. Revenue per person plummeted to a low of $1.35 million.
Everyone knows what happened next. In November 2022, 11,000 people were laid off, followed by another 21,000 in 2023, cutting a quarter of the entire company's workforce. Zuckerberg dubbed 2023 as the "efficiency year."
The results of efficiency are evident in the numbers. According to Meta's Q4 2025 earnings report, by the end of 2025, the company had 78,865 employees, nearly 8,000 less than at its peak. However, annual revenue had grown from $116.6 billion to $201 billion, a 72% increase. Revenue per person soared from $1.35 million to $2.55 million, an 89% growth.
The implications of these numbers are straightforward. Meta made more money with fewer people. In 2022, the marginal revenue generated by each additional employee was decreasing, but by 2024 and 2025, the revenue increment corresponding to each laid-off employee was expanding. This is a typical scale effect in tech companies, but Meta accelerated this process through layoffs.
This sets the backdrop for the March 2026 round of 700 job cuts. According to The Register, this is already Meta's second round of layoffs this year, with around 1,000 employees laid off in January in Reality Labs. NBC News, citing insiders, said there could be further, larger-scale reductions, potentially affecting up to 20% of the total workforce, around 15,000 people, which would bring Meta's employee count back to the 2021 level.
During the January earnings call, Zuckerberg's exact words were that the plan is to "flatten the team," allowing outstanding individual contributors to complete projects that used to require large teams. A Meta spokesperson's response was also quite templated, stating that "teams are regularly reorganized or adjusted to ensure they are in the best position to meet their goals."
Continuing to Bet on the AI Arms Race
Where did the money saved from the layoffs go? A look at capital expenditures makes it clear.
According to the Q4 2025 earnings reports and public guidance from various companies, the combined capital expenditures of the four companies, Amazon, Google, Microsoft, and Meta, will reach approximately $650 billion in 2026, a year-over-year increase of about 130%. Amazon accounts for around $200 billion (a 167% increase), Google for $175 billion to $185 billion (a 140% increase), Microsoft for an annualized amount of around $145 billion (a 127% increase), and Meta for $115 billion to $135 billion (a 73% increase).
As reported by CNBC, this is the largest single-year capital expenditure in the history of the tech industry. The AI infrastructure investment of these four companies in one year exceeds the GDP of Sweden.
Meta ranks fourth in absolute value, but in relation to its own size, the density of this investment is astonishing. Calculated at the median value of $1.25 trillion, the AI infrastructure investment per Meta employee is approximately $1.59 million, close to 62% of the per capita revenue ($2.55 million). In other words, for every $100 earned, Meta invests $62 in data centers.
The cost of this money is also direct. According to Barclay's analyst estimates cited by CNBC, Meta's free cash flow is expected to drop by almost 90% in 2026. Amazon is even more aggressive, with Morgan Stanley estimating a negative free cash flow of about $17 billion for Amazon in 2026. The four giants are all doing the same thing: trading today's cash flow for tomorrow's AI infrastructure.
A $9 Trillion Bet
Now let's look at the stock option plan. According to SEC filings and Motley Fool analysis, this plan covers six executives, including Chief Technology Officer Bosworth, Chief Product Officer Cox, Chief Operating Officer Olivan, Chief Financial Officer Susan, Chief Legal Officer Maoni, and Vice Chairman McCormick. Zuckerberg is not on the list, as his super-voting shares have already provided him with sufficient incentives.
The option's exercise conditions are designed with a step-up price threshold. According to the Motley Fool, the lowest-tier exercise price is $1,116 per share, requiring a price increase of 88% from the current approximately $615. The highest-tier is $3,727 per share, corresponding to a market value of about $9 trillion, which is 6 times the current $1.5 trillion. Five-year window, cash-out by 2031. If Meta truly reaches a $9 trillion market value, according to the Motley Fool's calculation, the top four executives (Bosworth, Cox, Olivan, Lee-Susan) each have a potential gain of about $2.7 billion.
The signal of this plan is very clear. Meta is not giving bonuses to executives but using options to bind the core team to an extremely aggressive growth target. With the current market value at $1.5 trillion and the target at $9 trillion, the $7.5 trillion difference in the middle is what Meta is betting AI can create in value.
Let's put the scale into perspective. $9 trillion is roughly equivalent to the current market value sum of Apple and Nvidia. Currently, no company globally has ever reached this market value. Meta has given its core executives five years to reach a number that has never existed in human business history.
A Formula
Putting three things together, Meta's logic is a simple resource allocation formula. Total employee compensation (including equity incentives) is roughly flat in 2022 and 2026, both around $26 to $28 billion. But AI capital spending has skyrocketed from $32 billion to $125 billion, a fourfold increase over four years. Meanwhile, a brand-new executive option pool has emerged, locking in the top six people for the next five years.
According to Benzinga, Meta's equity compensation expense in 2025 is about $42 billion, consuming most of the free cash flow. AI researchers' signing bonuses have reached the nine-figure mark, with researchers brought in from OpenAI reportedly receiving signing packages at the $100 million level. These figures, contrasted with the 700 employees laid off, clearly illustrate Meta's pricing logic regarding "people."
The money saved by laying off 700 people is roughly equivalent to Meta's AI infrastructure spending for a day and a half.
