Meta is reversing part of its management overhaul even as it keeps pouring billions into artificial intelligence.
The company has begun asking individual contributors in its Applied AI division whether they want to move back into manager roles as part of a recent internal reorganization, according to Business Insider, which cited four people familiar with the matter. The move is reportedly voluntary.
Applied AI is a new engineering division launched in 2026 to bridge the gap between Meta’s AI research and product execution. The group trains AI models and speeds up their deployment across Meta’s products.
Earlier this year, Meta reassigned roughly 7,000 employees to the unit, including some who had previously been managers before shifting into individual contributor roles. Meta did not immediately respond to Fortune’s request for comment.
The change marks a partial reversal of a broader restructuring that has shaped Meta’s strategy over the past year. As Mark Zuckerberg pushed the company toward what executives called a more AI-native future, Meta reduced management layers and emphasized smaller, faster-moving teams. The company said flatter structures would improve decision-making, reduce bureaucracy, and help offset the rising cost of its massive AI investments.
This was not Meta’s first pass at flattening. In 2023, during what Zuckerberg called the company’s 'year of efficiency,' Meta asked many managers and directors to move into individual contributor jobs or leave. The company described that process internally as 'flattening.'
That strategy hardened in 2026. In March, Fortune reported analysts expected Zuckerberg to help drive a broader 'cascade' of AI-related layoffs across the tech sector. Two months later, Meta cut about 10% of its workforce, or roughly 8,000 employees, and scrapped plans to fill 6,000 open positions as part of an efficiency initiative. The layoffs disproportionately affected managers and were meant to simplify reporting structures while freeing up resources for AI development.
Meta’s reorganization has not been smooth. Earlier this year, Wired reported employee frustration over the rollout of the Applied AI division, and some workers later received the option to pursue other opportunities within the company. In July, 26 Meta employees sued the company, alleging it had used internal AI systems and activity-monitoring data to disproportionately target workers on medical, parental, or family leave in the May cuts.
The company ended the second quarter with 75,472 employees, down 3% from the prior quarter. That figure includes approximately 8,000 employees affected by the May workforce reductions, according to Meta’s second-quarter 2026 earnings report.
The market has already voted on the tradeoff. Meta said second-quarter revenue reached $60.8 billion, up 28% from a year earlier, while total expenses climbed 55% to $42 billion as it kept investing in AI infrastructure and absorbing layoff costs. Zuckerberg said on the earnings call that AI investments are shaping every major part of the business. 'I’m also excited about how AI is helping our teams speed up product development,' he said.
Capital rewards clear rules. Meta’s latest move suggests the administrative state inside the company was never going to disappear on its own. AI may strip out some layers of bureaucracy, but building and deploying it at scale still requires human oversight, coordination, and leadership. The taxpayer does not pay Meta’s bills, but investors do, and they will keep watching whether these efficiency campaigns produce margins or just a new round of managerial churn.
