Meta has reduced its annual stock award allocation by around 5% for most employees, as the company ramps up spending on artificial intelligence infrastructure, the Financial Times reported.
The move marks the second consecutive year the Facebook parent has pared back equity compensation, underscoring mounting cost pressures even as it commits record sums to AI.
According to the Financial Times, which cited people familiar with the matter, the latest cut follows a steeper reduction of roughly 10% last year — a decision that reportedly unsettled sections of staff at the time. Meta declined to comment on the report, Reuters said.
AI spending surge
The decision comes as chief executive Mark Zuckerberg pushes aggressively into AI, positioning Meta to compete with rivals building large-scale data centres and advanced models.
In January, the company said it expects capital expenditure in 2026 to reach between $115bn and $135bn, largely driven by AI infrastructure. Big Tech companies collectively are projected to spend at least $630bn this year on AI development, according to industry estimates cited by Reuters.
Meta is constructing several gigawatt-scale data centres across the United States, including a major facility in rural Louisiana. US President Donald Trump has said that project alone could cost $50bn.
Cost discipline amid strategic reset
The stock award reduction also reflects broader restructuring within the group. Last month, Meta laid off about 10% of employees in its Reality Labs division, which employs roughly 15,000 people. The unit, responsible for the company’s virtual reality and metaverse initiatives, has recorded more than $70bn in losses since 2021.
The company has been reallocating resources away from certain virtual reality products towards AI-driven initiatives and wearable technologies, signalling a recalibration of its long-term bets.
In a further sign of strategic repositioning, Meta recently appointed Dina Powell McCormick — a former US government official and ally of President Trump — as president and vice-chair. The appointment is aimed at strengthening ties with governments and investors as the company expands its AI ambitions.
Balancing growth and incentives
Equity-based compensation has long been a key lever for retaining talent in Silicon Valley. A sustained reduction in stock awards may test morale at a time when competition for AI engineers and researchers remains intense.
However, investors have broadly backed Zuckerberg’s pivot towards AI, viewing infrastructure build-out as critical to long-term competitiveness against rivals such as Microsoft and Google.
As Meta deepens its capital commitments, the company faces a delicate balancing act: funding an expensive AI race while maintaining employee incentives and shareholder confidence.