Dive Transient:
- Meta’s worker compensation prices grew at an accelerated tempo within the third quarter, pushed by “technical” hires, significantly synthetic intelligence expertise, CFO Susan Li stated Wednesday.
- The tech behemoth ended Q3 with over 78,400 staff, up 8% yr over yr, pushed by elements reminiscent of “hiring in precedence areas of monetization,” Li stated throughout an earnings name.
- Trying forward, the corporate expects worker compensation to be its second-largest expense subsequent yr, she stated.
Dive Perception:
The information comes after experiences of an AI hiring spree at Meta earlier this yr.
In August, the corporate froze hiring in its AI division after spending months snapping up greater than 50 AI researchers and engineers, The Wall Avenue Journal reported. CEO Mark Zuckerberg approached staff of OpenAI, Google DeepMind and different labs with “e-mail overtures and WhatsApp messages that rapidly led to provides that in some instances reached $100 million in whole compensation,” the report stated.
The problem of Meta’s worker compensation prices got here up on Wednesday as a part of the corporate’s earnings outcomes for its fiscal third quarter ended Sept. 30.
Li stated whole bills will develop at a “considerably sooner proportion charge” in 2026 in contrast with this yr, with development primarily pushed by infrastructure prices, together with incremental cloud bills and depreciation.
“Worker compensation prices would be the second largest contributor to development as we acknowledge a full yr of compensation for workers employed all through 2025, significantly AI expertise and add technical expertise in precedence areas,” she added.
Within the wake of the information, Meta’s inventory dropped greater than 10% on Thursday.
“We predict the market’s response to Meta’s earnings report was accentuated by Alphabet and Microsoft reporting on the identical day, with the opposite two hyperscalers seeing materials income growth of their cloud companies resulting from AI,” Morningstar analyst Malik Ahmed Khan stated in a shopper’s observe.
“Meta, alternatively, is basically constructing infrastructure at an analogous scale with out being able to lease out capability for a tidy revenue. Because of this, traders are viewing Meta’s investments in AI as a lot riskier than these of its friends, as a result of it would not have the flexibility to lease out capability for AI and non-AI workloads if AI demand would not proceed to growth.”
