Zuckerberg Attributes Sales Slowdown to War and Layoffs to AI Costs

On May 1, according to The Wall Street Journal, Meta Platforms CEO Mark Zuckerberg provided new details about the company’s aggressive AI plans during an all-hands meeting on Thursday, responding to the market’s negative reaction to its first-quarter performance. Zuckerberg attributed the 8% drop in Meta’s stock price to investor concerns over an expected increase in capital expenditures and the company’s forecast of slowed growth for the second quarter. He noted that after the U.S. went to war with Iran at the end of February, Meta’s advertising business experienced a ‘trajectory change.’ He stated, ‘If oil prices go up, consumers will spend more on oil and gasoline, and spending on discretionary non-essential items will decrease, and advertising typically targets those types of products.’ Zuckerberg linked the company’s layoff plans for next month to the need to invest more in data centers and other AI infrastructure. He explained, ‘The company basically has two cost centers. One is computing and infrastructure, and the other is personnel. If we invest more in one area to serve our community, it means we have less capital to allocate to the other area. So this means we do need to moderately reduce the size of the company.’