Meta spent the first half of 2026 developing a plan to replace large amounts of employee work with AI agents and potentially reduce the size of some teams by as much as 60%.
The internal project, code-named Project OT, short for Organization Transformation, was eventually scaled back after Meta’s AI systems failed to deliver the improvements executives had expected.
Reuters reported the details after reviewing scores of internal documents, posts and recordings and speaking with more than 20 people familiar with the company.
Mark Zuckerberg and senior Meta executives developed the plan at his Hawaii compound in January.
The idea was to let AI agents take over routine work performed by thousands of employees, leaving smaller groups of what an internal planning document described as “talent-dense” workers to supervise the AI systems.
Project OT included two major restructuring waves.
The first was planned for May, followed by another in November. Layoffs would be combined with closing open positions and removing employees Meta considered poor performers.
One HR executive estimated that the overall reduction could become as large as, or larger than, the roughly 25% workforce reduction Meta carried out three years earlier.
However, on the night of May 19, just hours before the first round began, Zuckerberg cancelled planning for the November phase.
Meta still went ahead with cuts the following day, eliminating around 8,000 jobs, or roughly 10% of its workforce. During the same week, the company moved about 7,000 employees into AI-related roles.
Reuters could not determine exactly why Zuckerberg cancelled the second round.
Meta acknowledged that Project OT existed.
The company described it as a year-long effort to lower costs, redesign team structures and move employees into priority areas, including the production of AI training data.
Meta also confirmed that planners considered reductions of up to 60%, but said those scenarios applied only to certain teams and were never intended to cover 60% of the entire company.
Several major business units were excluded.
Meta said the second restructuring wave was cancelled before executives had determined how many additional employees would have lost their jobs.
The company said the project ultimately resulted in thousands of employees moving to newly created priority teams and that not every restructuring scenario under consideration was implemented.
Meta’s internal performance data showed a major gap between the amount of work AI agents generated and the amount that resulted in useful products.
According to a June internal post from Chief Technology Officer Andrew Bosworth, code changes to Meta’s internal platforms and infrastructure increased 220% year over year.
However, changes that actually reached users as new or improved features increased only 36%.
Internal documents also indicated that the increased AI activity created reliability and security problems.
An April post said unsupervised AI agents were carrying out “large-scale, disruptive actions” that humans would be unlikely to perform.
Major technical and security incidents, including service disruptions and potential data leaks, increased 40% from the previous year, while the amount of time employees spent dealing with those incidents increased 70%.
Infrastructure teams had reportedly raised reliability concerns as early as March.
In June, hackers also exploited Meta’s new AI customer-support bot to gain access to high-profile Instagram accounts, including the inactive Obama White House account.
Meta declined to comment on the internal performance figures.
Concerns also grew among Meta employees that they were helping build systems that could eventually replace them.
The company reassigned engineers to create software problems used as AI training data. Some employees complained internally that the work was repetitive.
Meta also introduced tracking software on devices used by U.S. employees that recorded keyboard and mouse activity so AI agents could learn how humans operate computers.
The company paused that program in June.
Since then, 26 employees have sued Meta, alleging that its AI systems unfairly targeted workers who were on medical leave during the layoffs.
Meta employees also began responding to executive posts with elephant images as internal frustration increased.
The company’s employee sentiment score fell from 74% favorable to 55% in its half-year Pulse survey, while labor organizing activity increased.
An internal document called the AI-Native Playbook outlined how Meta imagined its future workforce.
Traditional product teams containing 10 to 20 specialists could shrink into smaller groups of only three to five people.
Engineers, designers and product managers would also share a single job title: “builder.”
Meta planned to remove layers of middle management and use “agent-assisted analysis” to help determine daily priorities.
By June, at least 11 units had adopted the smaller pod structure.
Under the model, unit leaders could manage 30 to 50 employees with support from human-resources teams and unspecified “AI systems.”
Meta declined to explain exactly what those AI systems would do but said decisions involving performance ratings and promotions were and remain made by humans.
At a July company town hall, Zuckerberg acknowledged that AI agents had not advanced as quickly as Meta expected.
He told employees that the “trajectory of the agentic development” during the previous four months had not accelerated in the way executives anticipated.
However, Zuckerberg said he still expected the technology to deliver significant benefits within three to six months.
In August, Bosworth also told employees not to assume that AI productivity improvements should translate into additional time off.
Meta’s public messaging has since shifted.
The company is now running advertisements emphasizing its investment in people, while Zuckerberg recently published a 6,500-word essay predicting that AI could create an abundance of jobs even if individual companies employ fewer workers.
“Company sizes may shrink, just as they did in the transition from industrial giants to tech companies,” Zuckerberg wrote.
Despite scaling back Project OT, Meta has not reduced its investment in artificial intelligence.
The company plans to spend at least $130 billion on AI chips and infrastructure this year.
Meta reported 75,472 employees at the end of June, although that figure still included around 8,000 workers who were in the process of leaving under the May layoffs.
Zuckerberg has promised there will be no further company-wide layoffs in 2026.
However, that commitment does not rule out individual team reductions or additional restructuring in 2027.
The key question for Meta is now whether the useful features produced by its AI systems can eventually catch up with the massive increase in code those agents are already generating.
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