Meta CEO Links Stock Drop To Higher Capex, Plans Team Cuts And More Apps: Report

• Meta raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, up from the previous range of $115 billion to $135 billion, on Wednesday.
• Meta is looking to absorb some of its added CapEx costs by layoffs, including a 10% layoff planned for May.
• Zuckerberg said on Thursday that the company will reduce the size of teams where AI can allow for greater speed and efficiency.

Meta Platforms (META) CEO Mark Zuckerberg reportedly addressed employees in a companywide internal meeting on Thursday, attributing the stock’s sharp decline following the company’s first-quarter earnings to investor concerns over raised capital expenditure guidance and expectations of slower growth in the second quarter.

According to a report from The Wall Street Journal, Zuckerberg pinned the roughly 9% drop in share price on Thursday to those factors while maintaining that the company’s long-term trajectory remains very strong.

The  CEO is now reportedly planning to reduce team sizes and build more apps.

Zuckerberg Addresses Q1 Earnings Reaction

“But I think Q1 was, like, really insanely strong and Q2 is merely strong, and I think the combination of that and the capex increase is what drove the near-term reaction. But I don’t know,” Zuckerberg reportedly told employees about the stock’s drop on Thursday while adding that he still sees a very strong trajectory for Meta’s businesses.

Meta raised its 2026 capital expenditure forecast to between $125 billion and $145 billion, up from the previous range of $115 billion to $135 billion, on Wednesday. Meta CFO Susan Li said the higher spending is driven in part by rising memory prices and additional data-center costs needed to support future capacity requirements.

Zuckerberg also highlighted challenges to the company's ad business in light of current geopolitical turmoil and highlighted that customers are less likely to purchase discretionary items when they are spending more on gas.

Layoffs And Team Reduction Efforts

Meta is looking to absorb some of its added CapEx costs by layoffs, including a 10% layoff planned for May. Investing more in compute and infrastructure means the company has less to allocate to its employees, the CEO said. “So that means that we do need to take down the size of the company somewhat,” Zuckerberg reportedly said.

He also said that the company will reduce the size of teams where AI can allow for greater speed and efficiency. However, a reduction in team size does not necessarily mean layoffs; affected employees will be reassigned to new projects, including building more apps.

“Historically, we’ve built like four or five big apps. We want to build a lot more apps, so there’s a bunch of stuff that we’re trying to figure out, and some of this we just need to figure out over time,” Zuckerberg reportedly said.

Zuckerberg is reportedly eyeing around 50 new apps, though he intends to start small.

Meta’s chief people officer, Janelle Gale, did not rule out the possibility of further layoffs at the meeting, the report said.

How Did META Retail Traders React?

On Stocktwits, retail sentiment around META increased from ‘bullish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume stayed at ‘high’ levels.

META stock has added 11% over the past 12 months. 

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