Meta cuts employee stock payouts for second consecutive year amid AI investments

Meta is cutting stock-based compensation for employees for the second year in a row, the Financial Times reports, writes UNN.

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Meta has cut annual stock option grants by about 5% for most of its employees, Reuters quotes the article as saying, noting that this comes as CEO Mark Zuckerberg pours billions of dollars into the company's artificial intelligence goals.

Meta and other major tech companies are competing to build massive data centers to outpace rivals in the intense race for AI leadership in Silicon Valley.

In January, the company said it expects capital expenditures for 2026 to be in the range of $115 billion to $135 billion.

The article, citing sources familiar with the situation, states that Meta is cutting stock-based compensation for most of its employees for the second year in a row.

Last year, the company cut stock-based compensation by about 10%, which shocked some employees at the time, the Financial Times reported.

Last month, Meta laid off about 10% of employees in its Reality Labs division, which employed about 15,000 people, as the company redirects resources from some of its virtual reality products to devices.

This division, which has accumulated more than $70 billion in losses since 2021, includes Meta's ambitious bet on the "metaverse."

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Meta is building several gigawatt-scale data centers across the United States, including one in rural Louisiana, a project that former US President Donald Trump said would cost $50 billion.

Last month, Meta appointed Trump ally Dina Powell McCormick as president and vice chair, seeking to forge partnerships with governments and investors for its artificial intelligence projects.