In April, Meta’s earnings report revealed it (1)had its best first quarter in company history. Their revenue hit $56.3 billion, up 33% year-over-year, which is the fastest growth it has seen since 2021. Their net income landed at $26.8 billion. And yet, just after the report’s release, Meta stock fell about 7% in extended trading (2).
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A week before (3) the earnings report, Meta had notified roughly 8,000 employees they were losing their jobs. And six weeks before that, it had quietly granted six senior executives stock packages that could be worth as much as $921 million each, if Meta becomes the most valuable company of all time. To do this, Meta would need to beat out Nvidia for that title. That being said, for now, those options pay nothing.
A closer look at what these numbers mean
Huge layoffs followed by a successful earnings report might seem a bit contradictory, so here’s a closer look at the numbers Meta is dealing with.
The $56.3 billion was the most Meta had ever made in three months. The company runs one of the most efficient advertising businesses on the planet: more than $55 billion of that Q1 total came from ads, with a 19% rise in ad impressions and a 12% jump in the average price per ad (4). When both volume and price climb together, it’s a clear sign the business is growing its audience, and also getting better at monetizing it.
There’s a catch on that huge profit, though. Meta’s $26.8 billion net income looks like a 61% year-over-year jump, but $8.03 billion of that was a one-time tax benefit tied to the One Big Beautiful Bill Act. Take that out, and the adjusted earnings were $7.31 per share (5). This is still above the $6.79 analysts expected, but not a 61% boost in the actual business.
What really rattled investors was the spending forecast. Meta said it now expects capital expenditures of $125 billion to $145 billion for the year, up from an earlier estimate of $115 billion to $135 billion — and that’s almost twice what it spent last year.
Most of that money is going into AI chips, data centers and the infrastructure to support all of it. “This reflects our expectations for higher component pricing this year and, to a lesser extent, additional data center costs to support future year capacity,” The company said in its April earnings release (4).
The spending forecast was only part of the reason that the stock fell about 7% in extended trading. Another concern was that Meta’s combined daily active people across Facebook, Instagram, WhatsApp and Messenger fell quarter-over-quarter for the first time since the company began reporting the metric (4).
Big promises and lost jobs
Six weeks before Q1 earnings, SEC filings disclosed (6) a new stock option plan for six senior executives.
Each executive got 653,865 stock options, which was Meta’s first executive option grant since its 2012 IPO, according to Bloomberg (7). The payout depends on the stock price hitting a series of milestones, from $1,116 on the low end to $3,727 on the high end, and the awards expire by 2031 (8). If the stock never gets to $1,116 by then, the executives get nothing from the plan. If it reaches the top target, each option package would be worth $625.6 million, according to Equilar (9). With the added restricted stock grants for certain executives, their total potential payout rises to $921 million each.
To hit the top payout, Meta’s market value would have to reach $9.5 trillion (3) — a level no company has ever touched. Even Nvidia, at $5.053 trillion and now the most valuable company in the world, hasn’t come close (10).
A few weeks later, on April 23, Meta’s chief people officer, Janelle Gale, sent out the memo to announce that about 10% of the company’s 77,986 employees — roughly 8,000 people — would lose their jobs on May 20. (11) Meta also cut 6,000 open roles (12) and moved about 7,000 employees into newly created AI-focused teams (13). In Singapore, some workers got the news at 4 a.m. (14)
Gale said the cuts were part of Meta’s effort “to run the company more efficiently and to allow us to offset the other investments we’re making (12).”
Zuckerberg had already hinted at the thinking in January. “We’re starting to see projects that used to require big teams now be accomplished by a single, very talented person,” he said on Meta’s Q4 2025 earnings call (15).
What this means for your money
If you own Meta stock, you’re basically making the same bet the executives are making. The company says it will spend $125 billion to $145 billion on capex in 2026, and that money is going out whether the AI payoff materializes fast or not.
For now, the Family of Apps is still doing the heavy lifting: Q1 ad revenue came in at $55.024 billion, up about 33% from last year’s $41.392 billion (16). The question is whether all that AI spending eventually produces better efficiency, better engagement and enough growth to justify the bill.
If you work in tech, Meta isn’t the only company that’s affected. Amazon, Salesforce and Snap all made significant cuts this year, and each one said it was about becoming more efficient with AI. Companies are replacing headcount with infrastructure, and treating the two as substitutes, but no one knows how well that would work yet.
Meta’s six executives are betting on it working, even though they haven’t seen the payoffs.
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Investor Atmeta (1); Stocktwits (2); Fortune (3), (6); Sec (4), (16); Cnbc (5); Bloomberg (7), (11); Corpgov Law Harvard (8); Equilar (9); Companiesmarketcap (10); Npr (12); Nytimes (13), (14); Seekingalpha (15)
This article originally appeared on Moneywise.com under the title: Meta gave 6 executives options worth up to $921M each, then cut 8,000 jobs after a record $56.3B quarter
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