Mumbai, August 26, 2026: Meta explored reducing the size of some teams by as much as 60% as part of an ambitious plan to make its workforce “AI native”, before Chief Executive Officer Mark Zuckerberg called off plans for a second round of restructuring amid employee resistance and concerns over the technology's productivity gains, according to a Reuters report.
The initiative, code-named Project OT, short for Organization Transformation, was developed by Zuckerberg and senior executives during their annual leadership retreat at his Hawaii compound in January, the report said.
AI Restructuring Plans
The plan envisaged artificial intelligence taking over a significant amount of work performed by thousands of employees, with smaller groups of human staff overseeing virtual workers. Meta considered layoffs, redeployments, closing vacant positions and removing employees it considered poor performers.
Scenario-planning exercises explored reducing the size of some teams by up to 60%, although Meta said it never intended to cut 60% of its overall workforce. The restructuring was planned in two waves, in May and November.
Zuckerberg Calls Off Second Restructuring Wave
Meta proceeded with a 10% workforce reduction on May 20, but Zuckerberg called off planning for the November restructuring hours before the first round, according to the report.
By then, employees were openly resisting several AI-related initiatives, fearing they were helping build technology that could replace their jobs. Internal data was also raising questions about whether autonomous AI agents were delivering the productivity improvements executives had anticipated.
Meta confirmed the existence of Project OT and described it as a year-long initiative focused on reducing costs, redesigning teams and moving employees into priority areas, including work to produce training data for AI models.
The company acknowledged that some scenarios considered reductions of up to 60% in certain teams, through both layoffs and redeployments, but said several major units were not involved.
“As part of our company restructuring earlier this year, we asked some teams to conduct a scenario planning exercise looking at the potential impact of redeployments, open role closures and cuts,” Meta said.
“This ultimately resulted in moving thousands of employees to do priority work on several newly-established teams, as has been publicly reported. Ultimately, we didn’t move forward with every scenario from the exercise – and it was never assumed we would.”
Meta said executives abandoned the second wave before deciding how many employees would ultimately have lost their jobs.
Meta's 'AI-Native' Workplace Takes Shape
The restructuring emerged from Meta executives' interest in the concept of building an “AI native” company rather than simply adding AI tools to existing processes.
One Project OT document described the vision as: “AI-ready tools and agents interact, workflows are automated, new builds are AI-first.”
Meta executives, including Chief Data Officer Alex Schultz and Head of Product Naomi Gleit, visited Asia in 2025 and examined how startups there had structured their organisations around AI, according to the report. Meta also researched AI startups and launched pilot projects to determine how the approach could work inside the company.
Gleit told Reuters in June that she had spent “quite a bit of time” at Meta's Singapore office and said practices there had “inspired some of the teams in California and New York”. She said many changes were “bottom-up”, reflecting practices employees had already begun adopting.
Small 'Pods' Replace Traditional Team Structures
One of Meta's early experiments was announced in July 2025 by Vice-President of Product Management Ime Archibong. His team created five small technology “pods”, each comprising two to three engineers and a designer using AI tools.
Instead of traditional six-month product cycles, the teams were expected to produce prototypes through four-week “sprints”.
“In basketball, embracing the fast break lets you take more shots – and better ones. We expect the same with AI tools: they allow us to explore more ideas with less cost and higher fidelity,” Archibong wrote.
“This isn’t just more fun – in an AI-first era, we believe it’s the winning strategy.”
An internal “AI-Native Playbook” later envisaged traditional engineering and product-design roles being replaced with a generic “builder” designation. Middle-management layers would be reduced, small pods would report to senior unit heads and “Agent-assisted analysis” would help determine daily priorities.
By June, at least 11 units, including engineering and research teams, had adopted small pods, according to the report.
Meta also experimented with a “village approach” to people management. High-level “Org Leads”, supported by human-resources personnel and unspecified “AI systems”, would oversee performance ratings and promotions, while “Pod Leads” would guide day-to-day work without formal management authority.
One employee assigned to manage a pod expressed confusion about the arrangement, writing: “I’m not going through manager training, and I’m not getting access to ratings & manager tools.”
Meta said teams had “experimented in different ways with how to be more agile” and stressed: “Performance rating and promotion decisions were and are made by people, not AI.”
Meta Sought 'Irreplaceable Talent'
The company also introduced a human-resources tool to identify “Irreplaceable Talent”, according to an internal document cited by Reuters.
The document referred to a hypothetical “10X Performer”, reflecting the Silicon Valley concept of an exceptionally productive employee. Meta intended to use some savings from workforce reductions to offer large compensation packages to attract and retain highly sought-after talent, particularly AI engineers, according to people familiar with the matter.
Meanwhile, engineers were moved to a new Applied AI Engineering unit, which was tasked with creating software-engineering problems that could be used as training data to improve Meta's AI models.
Some employees criticised the assignments internally as repetitive and uninteresting. Meta, however, said data produced by the unit had helped train an AI model released in July.
By the end of May, headcount in some engineering units had fallen by as much as 30% because of job cuts and reassignments, according to the report.
Employees Rebel Against AI Transformation
Employee unease intensified after Reuters reported on March 13 that Meta was considering layoffs potentially affecting 20% or more of its workforce.
The company had previously cut about 25% of its workforce between late 2022 and early 2023.
Executives initially avoided discussing the report widely and instructed senior managers to tell their teams that roles should be expected to “evolve” because of AI, according to internal talking points.
Reuters subsequently reported in April that Meta planned to cut around 10% of its workforce on May 20 and was considering further reductions later in 2026. Meta eventually confirmed the first round to employees.
Tensions increased after Meta required tracking software on US employees' devices to capture keystrokes and mouse clicks for training AI agents to reproduce human interactions with computers.
Employees concerned that they could be training their replacements posted angry messages, jokes and memes on Meta's internal Workplace platform. Some responded to executive posts with images of elephants, portraying layoffs as the elephant in the room, while others clashed with Chief Technology Officer Andrew Bosworth over the company's handling of its AI initiatives.
Employee sentiment fell from 74% favourable to 55% favourable in Meta's half-year Pulse survey, according to the report, while labour-organising efforts gained momentum.
AI Productivity Gains Fall Short Of Expectations
Internal figures also raised questions about the benefits of Meta's AI push.
Changes to internal software platforms and infrastructure increased 220% year-on-year, according to an internal post by Bosworth in early June. However, changes resulting in new or upgraded features reaching Meta users increased only 36%.
Infrastructure teams had warned as early as March of “reliability warning signs” linked to the surge in AI-generated coding. Another internal post said unchecked AI agents were carrying out “large-scale, disruptive actions that humans are unlikely to execute.”
Major technical and security incidents, including service disruptions and possible data leaks, rose 40% from the previous year, while the time employees spent “firefighting” them increased 70%, according to internal posts cited by Reuters.
In early June, hackers also exploited Meta's AI-powered customer support bot to gain access to high-profile Instagram accounts, including the dormant Obama White House account, according to the report.
Meta declined to comment to Reuters on the internal data concerning AI-related disruptions.
Zuckerberg Promises Stability
After abandoning the November restructuring plans, Meta proceeded with the 10% workforce cut on May 20. Zuckerberg subsequently told remaining employees that he did “not expect other company-wide layoffs this year” and wanted to provide greater “stability.”
Executives also took steps to address employee morale. Meta paused its mouse-tracking programme, allowed some employees assigned to the new AI engineering unit to return to their previous teams and increased attention to workplace perks, travel and social events.
In early July, Zuckerberg made an unexpected appearance at an internal town hall and acknowledged problems with the timing of the reorganisation. He said AI agent technology had not “accelerated” as rapidly as expected, but predicted improvements over the following three to six months.
At the same time, Zuckerberg publicly emphasised a people-focused vision for Meta's AI strategy. In an internal post in June, he wrote: “We are the only major company focusing on empowering people and putting the power of this new technology in billions of people’s hands across all our products – rather than primarily focusing on automating work.”
Meta nevertheless faces pressure over the cost of its AI investments. The company plans to spend at least $130 billion on AI chips and other infrastructure in 2026, according to the report, citing estimates from LSEG.
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In his essay The Future is for Everyone, Zuckerberg predicted there could be “an abundance of jobs in the future”, while acknowledging that individual companies could employ fewer people.
“Company sizes may shrink – just as they did in the transition from industrial giants to tech companies,” he writes. “But this doesn’t mean fewer jobs overall. It implies a larger number of companies with fewer people each.”
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