Zuckerberg concedes AI agent progress has stalled at Meta, four months into a restructuring built on the opposite bet

At a July 2 town hall recorded by Reuters, the Meta CEO told staff the 'trajectory of the agentic development' has not accelerated as expected — after cutting 10% of the workforce and reassigning 7,000 employees to AI teams in May.

At a July 2 internal town hall recorded by Reuters, Mark Zuckerberg told Meta staff that “The trajectory of the agentic development over at least the last four months hasn’t really accelerated in the way that we expected.” Four months, in this context, is a specific and awkward number. It’s roughly the elapsed time since Meta laid off about 10% of its global workforce and reassigned some 7,000 employees to AI-focused teams in May, a restructuring premised on the opposite forecast.

Zuckerberg conceded the reorganization hadn’t been as “clean” as it could’ve been, and that executives had miscalculated the timing. Planning began in January and February, when leadership was, in his telling, “worried that we weren’t going to move fast enough to adapt” and “super optimistic” about tools like Anthropic’s Claude Code. Those bets, he said, “haven’t come to fruition yet.”

The numbers around the admission haven’t moved. Meta still expects to spend as much as $145 billion on AI infrastructure this year, a line item that sits inside a broader Big Tech capex pool of more than $700 billion. TechCrunch pegged the corporate layoffs at around 8,000. Zuckerberg told staff in May he didn’t expect further companywide cuts this year, though Reuters noted some workers remained skeptical.

Alexandr Wang, Meta’s AI chief, pushed back on X, arguing Zuckerberg was describing the industry broadly rather than Meta specifically, and pointing to Business Insider reporting that Meta’s next model, code-named “Watermelon,” has caught up with OpenAI’s GPT-5.5 on unspecified benchmarks. A Meta spokesperson declined to comment. TechCrunch said it had reached out.

The structural read is the one Zuckerberg avoided saying out loud. The May restructuring, including the standing up of an internal “Agent Transformation” group, was justified by a timeline that the CEO now says the technology didn’t keep. The capex commitment predates the timeline and outlasts it. That’s the shape of the current AI cycle in miniature: the spending decisions are load-bearing, the capability forecasts underneath them aren’t.

Zuckerberg concedes AI agent progress has stalled at Meta, four months into a restructuring built on the opposite bet

Sources