28 August 2026

Meta explored AI agents to cut workforce by up to 60 percent

• Meta created Project OT in January to test replacing thousands of employees with AI agents overseen by small human teams, exploring scenarios with 25-60 percent headcount reductions.
• The first round of layoffs from Project OT occurred in May, but Meta canceled the planned second wave before fully determining scope, citing uncertain productivity gains.
• Internal documents showed AI agents caused problems: code output jumped 220 percent year-over-year, but actual features reaching users only increased 36 percent, and incidents rose 40 percent.
• Clara Shih, who led Meta's business AI group building agents, left in spring and founded a nonprofit helping entry-level workers adapt to AI displacement after witnessing the compression of multi-person roles.

How it was covered

PlatformerCasey Newton

Clara Shih, who led Meta's business AI group building agents for WhatsApp and Messenger, quit this spring after observing that AI agents could compress product development tasks previously requiring multiple specialists into work for one or two people. She started the New Work Foundation nonprofit to help entry-level workers navigate AI disruption, departing from the optimistic narrative she once believed that automation would free workers for higher-order tasks rather than displace them.

Reported by Ars Technica