Meta has reduced its annual distribution of stock options by about 5 per cent for most employees, according to a report by the Financial Times. The move comes as chief executive Mark Zuckerberg channels billions of dollars into the company’s artificial intelligence ambitions. The company, which owns Facebook, declined to comment on the report.
Stock Awards Cut For Second Year
The Financial Times said Meta has cut equity based awards for the majority of its staff for the second consecutive year, citing people familiar with the matter. Last year, the company reduced stock awards by roughly 10 per cent. At the time, the decision surprised some employees.
Now, the latest reduction signals a continued shift in priorities. As Meta intensifies its investment in AI, it appears to be adjusting compensation structures to support those goals. Consequently, many employees will receive smaller annual stock grants compared with previous years.
Billions Directed Towards AI Expansion
Meta and other large technology companies are competing aggressively in Silicon Valley’s fast moving AI race. Each group aims to build larger and more powerful data centres to secure an advantage. Therefore, capital expenditure has surged across the sector.
In January, Meta said it expected capital expenditure in 2026 to range between 115 billion and 135 billion dollars. Meanwhile, major technology companies collectively plan to spend at least 630 billion dollars this year on artificial intelligence initiatives.
Meta is building several gigawatt scale data centres across the United States. These include a major project in rural Louisiana, which President Donald Trump said would cost 50 billion dollars. As a result, infrastructure spending has become central to the company’s strategy.
Restructuring Within Reality Labs
At the same time, Meta continues to reshape its internal operations. Last month, the company laid off about 10 per cent of employees within its Reality Labs division, which previously employed around 15,000 people. The group focuses on virtual reality and augmented reality technologies.
The division has accumulated more than 70 billion dollars in losses since 2021. It also houses Meta’s ambitious metaverse initiative. However, the company has started redirecting resources away from some virtual reality products and towards wearable devices.
In addition, Meta last month appointed Trump ally Dina Powell McCormick as president and vice chairman. The move aims to strengthen partnerships with governments and investors as the company advances its artificial intelligence projects. Together, these changes underline Meta’s determination to prioritise AI, even as it reshapes compensation and restructures key business units.
Inputs from Reuters.