Big tech corporations Meta has poured massive funds into artificial intelligence (AI) investments while shrinking employees' stock options for a second straight year.
On the 19th (local time), the Financial Times (FT) in the United Kingdom reported that Meta cut the annual stock option allocation for tens of thousands of employees by about 5% this year. The company also reduced stock options by about 10% last year, drawing internal backlash, and assessments say the impact feels bigger as the cuts continue again this year.
According to FT, at Meta, beyond base salary and annual bonuses, the annual stock option known as the "equity refresher" constitutes a key pillar of employee compensation. The company had maintained an internal policy of keeping a top-tier pay framework among local big tech, but appears to have shifted course for now as it expands the scale of AI investment.
Meta has been pursuing aggressive investments to develop artificial superintelligence (ASI, AI that solves problems independently) and ultimately secure a monopolistic position in AI. In fact, Meta estimated this year's capital expenditure (CAPEX, the expense for fixed assets purchased to generate future profit) could reach as much as $130 billion (about 188 trillion won), which is expected to be directed toward building infrastructure needed for data center construction and advanced AI model development.
Meta has also reportedly offered compensation packages and incentives worth up to several hundred million dollars a year to recruit key talent. In exchange for proposing exceptional terms to secure top-tier AI talent, the company has adopted a selective investment strategy that keeps a tightening stance in its overall employee compensation system.
Meta is also revamping its performance review system this year and is said to further strengthen rewards for top performers. According to internal sources, while stock compensation for employees overall has decreased, the company reorganized the structure to allocate more rewards to high performers, and Meta's total compensation budget has instead increased.
The company is also carrying out restructuring in parallel to ease profitability concerns stemming from expanded investments. Meta laid off about 1,500 people last month in the loss-making Metaverse institutional sector, a move seen as an attempt to soothe jittery investor sentiment through expense efficiency at a time when AI investments have yet to translate into substantial revenue.
Meanwhile, the latest move has sparked mixed discontent and pushback inside the company. On the internal online community, posts have been popping up saying "Another cut?" and "I'll cut my working hours by 5%." Still, given the recent instability in the IT job market and the fact that Meta's absolute level of compensation remains high, some analysts say the reduction in stock options is unlikely to lead to a large-scale exodus.