Meta has reported a sharp rise in profitability for the first quarter of 2026, even as it prepares to cut around 8,000 jobs in a move aimed at improving efficiency and supporting its expanding investment in artificial intelligence.
The company posted revenue of $56.3 billion, up 33% year on year, while net income rose 61% to $26.8 billion, according to reporting by Variety. Earnings per share stood at $10.44, significantly ahead of analyst expectations tracked by LSEG Data & Analytics.
Despite this performance, Meta has confirmed plans to reduce its workforce by approximately 10% and close around 6,000 open roles, signalling a strategic reset rather than a response to financial pressure.
Layoffs tied to efficiency and AI investment
The company has positioned the job cuts as part of a broader effort to streamline operations.
According to Variety, the layoffs are intended to improve efficiency and help “offset” Meta’s rising investment in AI infrastructure and capabilities. The company has sharply increased its capital expenditure outlook for 2026 to between $125 billion and $145 billion, up from a prior estimate of $115 billion to $135 billion.
Chief financial officer Susan Li said the increase reflects higher component costs and additional data centre investments needed to support future capacity.
Key financial and operational indicators:
- Revenue: $56.3 billion, up 33% year on year
- Net income: $26.8 billion, up 61%
- Workforce reduction: About 8,000 jobs, or 10% of staff
- Open roles to be closed: Approximately 6,000
- Capital expenditure: $125 billion to $145 billion projected for 2026
The scale of spending highlights how central AI has become to Meta’s strategy.
Growth driven by advertising and platform engagement
Meta’s financial performance was supported by strong advertising demand and continued user engagement across its platforms.
Daily active users across Facebook, Instagram and WhatsApp averaged 3.56 billion in March 2026, representing a 4% increase year on year, the company said. However, this figure was slightly lower than the previous quarter, with the decline attributed to internet disruptions in Iran and restrictions on WhatsApp access in Russia.
The company also reported improvements in engagement metrics:
- A 10% increase in time spent on Instagram Reels following ranking enhancements
- More than 8% growth in Facebook video watch time, the strongest quarterly gain in four years
- Over 500 million users on Facebook and Instagram watching AI-translated videos weekly
These trends point to continued platform strength even as the company adjusts its cost structure.
AI adoption expands across products and advertisers
Artificial intelligence is playing a growing role in both product development and monetisation.
Meta said more than 8 million advertisers are now using at least one of its generative AI creative tools. Early testing shows that advertisers using video-generation features are achieving over 3% higher conversion rates.
CEO Mark Zuckerberg described the quarter as a milestone, highlighting the release of a new model from Meta Superintelligence Labs and the company’s ambition to deliver advanced AI capabilities at scale.
“We’re on track to deliver personal superintelligence to billions of people,” he said in a statement cited by Variety.
Margins, taxes and regulatory pressures
The company’s results were also influenced by tax adjustments.
Meta recorded an $8.03 billion income tax benefit in the first quarter of 2026, partially offsetting a $15.93 billion non-cash tax charge recorded in the third quarter of 2025 following legislative changes.
At the same time, the company flagged ongoing regulatory risks. It noted continued scrutiny in both the United States and the European Union, including issues related to youth safety and compliance with the Digital Services Act.
The European Commission has preliminarily found that Meta’s platforms may be in breach of the Act for failing to adequately assess risks related to underage users, according to the company’s disclosures.
Outlook points to continued growth with cost discipline
Meta expects second-quarter revenue to be in the range of $58 billion to $61 billion, indicating continued growth momentum.
However, the combination of rising capital expenditure and workforce reductions suggests a clear shift in how the company is balancing expansion with efficiency.
The strategy reflects a broader trend across the technology sector, where companies are investing heavily in AI while simultaneously re-evaluating workforce size and structure.
Meta’s latest results underline a key dynamic shaping the industry. Strong financial performance does not preclude cost restructuring when the underlying operating model is changing.
The company is using its current strength to invest in AI at scale, even if that requires difficult adjustments to its workforce.
For now, the numbers point in two directions at once. Growth remains robust, but the structure needed to sustain it is evolving.