Zuckerberg scraps second wave of Meta's AI-native reorg

Meta CEO Mark Zuckerberg canceled the second wave of Project OT, an internal plan to remake Meta into an AI-native company by cutting some teams by up to 60% and handing much of the daily work to AI agents, Reuters reported, per Incrypted.

The plan, short for Organization Transformation, took shape in January during Meta leadership's annual retreat at Zuckerberg's Hawaii estate. The vision called for AI agents to absorb much of the daily work now done by thousands of employees, overseen by smaller, talent-dense human teams. Meta stressed the 60% figure applied to specific teams, not the whole company, but the projected scale still matched or exceeded Meta's 2023 layoffs, which cut about a quarter of its workforce.

Project OT was designed to run in two waves, the first in May 2026 and the second in November. The day before the first wave hit, Zuckerberg pulled the plug on the second one, citing employee pushback and AI progress that hadn't kept up with the plan's assumptions.

The productivity data behind that admission cuts both ways. Code changes to Meta's AI platforms and infrastructure rose 220% year over year, but new or improved features that reached users grew only 36%. Technical and security incidents climbed 40%, and the time employees spent resolving those incidents rose 70%. Meanwhile, employee-sentiment scores fell 19 points during the push, alongside reported keystroke-tracking software and growing labor-organizing activity, the kind of friction Intokened covered when Meta employees sued over AI-assisted layoffs.

• Planned team cuts under the most aggressive scenarios: up to 60%
• Code changes to AI platforms: +220% year over year
• Shipped features reaching users: +36% year over year
• Employee-sentiment score change: -19 points
• Comparable prior cut: Meta's 2023 layoffs, about 25% of staff

The restructuring wasn't only about headcount. Meta wanted to shrink traditional development teams, 10 to 20 people with distinct roles for engineers, designers, managers, and researchers, down to 3 to 5 people with more universal responsibilities, reporting to the head of a larger division instead of climbing a multi-layer management chain. Meta had already tested that model in parts of the company through 2025, and by June 2026 at least 11 divisions, including engineering and research teams, had adopted it. An internal HR tool built around a "10X Performer" concept aimed to flag employees who, with AI, could do work that used to take an entire team, and Reuters reported Meta planned to funnel some of the savings from cuts into large pay packages meant to keep its strongest AI talent from leaving. The company's broader ambitions for personal AI agents haven't changed. Zuckerberg has separately said he expects billions of people to use personal AI agents within five years, a forecast this reversal doesn't touch even as the internal restructuring behind it stalls.

Project OT is shelved for this year, though the smaller AI-assisted teams already in place aren't going anywhere. Zuckerberg's own framing suggests the pause is about timing rather than direction: the agents didn't get good enough fast enough to justify cutting the humans who'd have to cover for them.

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