Facebook Parent Meta: Mark Zuckerberg’s vision for his social media platform “Facebook-parent Meta” in reducing wasteful spending and the proposed “year of efficiency”, has led to another massive job cuts, as the company plans to lay off another 10,000 workers, marking the second round of significant job cuts announced by the tech giant in four months according to the New York Times. That’s down another 11,000 staff who worked for the company.
Twitter’s Layoff Footstep
The latest layoffs, announced on Tuesday, come after Twitter announced that it was eliminating approximately ten percent of its remaining staff its workforce, or 200 jobs, in the single largest round of cuts in the company this year. Facebook CEO Mark Zuckerberg said he expects to announce restructurings and layoffs in Meta tech groups in late April, and then Meta business groups in late May, he wrote. In a “small number of cases, it may take through the end of the year to complete these changes.”
Recall that in a recent Facebook post, CEO Mark Zuckerberg said the job cuts will take place “over the next couple of months. Shares of Meta rose more than 4% in early trading Tuesday following the announcement. This did not come as a surprise to many as Meta had earlier posted a sharp drop in profits and reported its third straight quarterly decline in revenue. During the earnings call, Zuckerberg promised investors that 2023 would be the “year of efficiency” for the company, following years of heavy investment in growth and a more immersive version of the internet called the metaverse.
Overall, Facebook expects to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that they haven’t yet hired according to Zuckerberg.
Layoff Epidemic
Meta is far from the only Big Tech company to undergo layoffs amid higher inflation, recession fears, and a whiplash in pandemic-induced demand. As of September 2022, Facebook reported a headcount of 87,314, per a securities filings. With 11,000 job cuts announced in November and the 10,000 announced Tuesday, that would bring Facebook’s headcount down to around 66,000 — a reduction of about 25%.
In the first months of this year, Amazon (AMZN), Google-parent Alphabet, and Microsoft (MSFT) have all confirmed major job cuts impacting tens of thousands of tech workers. According to the BBC, the situation changed radically for the social media giant and other tech companies as pandemic restrictions eased and people returned to their offline lives. Meta’s core business was also hit by privacy changes implemented by Apple (AAPL) and advertisers tightening budgets amid recession fears.
Facebook Year of Efficiency
In a memo, Mr Zuckerberg told employees he believed the company had suffered “a humbling wake-up call” in 2022 when it experienced a dramatic slowdown in revenue. When the first round of job cuts was announced in November, Zuckerberg blamed himself at the time for the company’s over-hiring earlier in the pandemic. Meta nearly doubled its headcount between March 2020 and September of last year, as the Covid-19 crisis led to a surge in demand for digital services. Zuckerberg added, “At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years”.
Facebook closed last year with some difficult layoffs and restructuring of some teams. When Facebook did this during the earnings call in early February, Zuckerberg said clearly that this was the beginning of our focus on efficiency and not the end. He added that the company would be focused on “flattening” its organizational structure and removing some layers of middle management to make decisions faster. Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation.