A Hawaii retreat, staff revolt, and weak AI: How Meta's 60% layoffs plan came apart

A major restructuring plan at Meta, known as Project OT or Organization Transformation, was set to cut up to 60 percent of the company's staff and replace them with AI agents, according to a Reuters report. The plan, which came out of a leadership retreat at Mark Zuckerberg's Hawaiian compound, envisioned a future where AI handled the bulk of daily tasks at Meta, with only a small core of high-performing employees left to supervise the technology.

Project OT was intended to run in two waves, one in May and another in November, but only the first wave materialized. On May 19, Meta announced it would lay off 8,000 employees, about 10 percent of its 78,000 workforce. Zuckerberg subsequently canceled planning for the November wave and the remaining cuts were ultimately called off.

The structural aspect of Project OT involved replacing traditional product teams with smaller pods of three to five people, all sharing the same generic title of "builder." Layers of middle management were to be eliminated, and unit heads were to oversee 30 to 50 employees, while pod leads ran daily operations without formal authority.

HR built a tool to identify irreplaceable talent, echoing the old Silicon Valley belief in the engineer who could perform the work of ten. Employee tracking programs for AI training were also implemented, leading to widespread employee revolt. In April, Meta notified US employees that their keystrokes, mouse clicks, and screens would be captured by AI models to learn how people complete tasks on a computer.

More than 1,000 Meta employees signed a petition against this tracking, and many reacted to executive posts with pictures of elephants. Employee sentiment dropped from 74 percent to 55 percent. Despite the AI productivity data showing a 220 percent increase in code changes year-over-year and a 36 percent increase in changes that shipped new or improved features to users, internal posts revealed reliability warnings as early as March and a 40 percent rise in major technical and security incidents.

Zuckerberg acknowledged in July that AI agent technology had not accelerated as fast as expected and asked for three to six more months. Meta has since paused the employee tracking, improved office snacks, and launched a campaign emphasizing the importance of people over technology. Despite these measures, Meta continues to commit over $130 billion to AI infrastructure this year.

Zuckerberg assured that there would be no further layoffs this year, but with two conditions: company-wide and this year only.