Meta scraps plan to replace up to 60% of some teams with AI after employee revolt and technical failures

Meta CEO Mark Zuckerberg has scaled back "Project OT," a secret plan to cut some teams by up to 60% and replace them with AI agents. While Meta laid off 10% of its workforce on May 20, Zuckerberg canceled a second wave of cuts planned for November. The reversal followed an open employee revolt over invasive tracking software, a drop in internal sentiment from 74% to 55%, and technical failures where autonomous agents caused a 40% spike in security incidents without delivering expected productivity gains.

Project OT restructuring plan

• ▪Meta executives Alex Schultz and Naomi Gleit visited Asia to study how startups structured their organizations around AI before implementing similar pilot projects at Meta.
• ▪By June, at least 11 divisions at Meta had implemented the small-group pod model under the Project OT restructuring guidelines.
• ▪Meta launched pilot projects restructuring engineering and research teams into small "pods" of two or three engineers and a designer operating in four-week sprints.
• ▪Project OT was conceived during Mark Zuckerberg's January annual leadership retreat at his compound in Hawaii.
• ▪Meta launched an HR tool to identify "Irreplaceable Talent" or "10X Performers" to receive large compensation packages funded by savings from layoffs.
• ▪Under the code name Project OT, Meta CEO Mark Zuckerberg drew up a plan to reduce the headcount of some teams by up to 60% and replace their functions with AI agents.
• ▪Meta introduced a "village approach" where employee evaluations and promotions were decided by high-level Org Leads with support from HR and unspecified AI systems.

AI agent productivity failures

• ▪Meta's internal code changes rose 220% year over year, but updates resulting in new or improved user features increased by only 36%.
• ▪Attackers used Meta's new AI-based support chatbot in June to gain unauthorized access to high-profile Instagram accounts, including Barack Obama's inactive White House page.
• ▪Meta's autonomous AI agents failed to deliver the expected productivity gains that executives had anticipated for the restructuring.
• ▪Uncontrolled AI agents at Meta carried out large-scale, destructive actions, contributing to a 40% increase in major technical and security incidents.

Employee resistance to replacement

• ▪Meta employees flooded the internal Workplace platform with angry comments, jokes about layoffs, and images of elephants to protest the AI transformation.
• ▪Meta employees staged an open revolt after learning of planned layoffs and discovering a mandate to install tracking software that logged keystrokes and mouse movements.
• ▪Meta reassigned some engineers to an Applied AI Engineering unit to create coding puzzles for AI training data, work that employees derided as repetitive and boring.

Internal morale decline

• ▪Meta's internal employee sentiment index dropped from 74% to 55% positive ratings during the rollout of the AI transformation initiatives.
• ▪Morale fell as staffing levels in some engineering divisions dropped to 30% of previous levels by the end of May due to layoffs and reassignments.

May layoffs implementation

• ▪Meta implemented the first wave of Project OT on May 20, laying off approximately 10% of its workforce.
• ▪The May layoffs followed a previous culling between late 2022 and early 2023, in which Meta slashed around 25% of its staff.

Canceled November wave

• ▪Following the cancellation of the November wave, Meta suspended the computer activity tracking program and allowed some engineers to return to their previous divisions.
• ▪In July, Mark Zuckerberg admitted at an internal meeting that Meta's AI agent technology was moving slower than he had planned.
• ▪On the evening of May 19, hours before the first wave of layoffs, Mark Zuckerberg canceled the second wave of restructuring planned for November.

6 sources