Meta, the parent company of Facebook, Instagram, and WhatsApp, is planning to reduce its workforce by 10,000 jobs as part of a “year of efficiency,” according to CEO Mark Zuckerberg. This is the second round of significant job cuts by the company, which let go of 11,000 employees in November 2022. Zuckerberg acknowledged that the cuts would be challenging and that the company had received a “humbling wake-up call” in 2022 due to a significant revenue slowdown.
In addition to the 10,000 job cuts, the company will leave 5,000 vacancies unfilled. While earnings were down 4% year-on-year for the three months ending in December 2022, Meta still generated over $23 billion in profit in 2022.
Mark Zuckerberg mentioned several factors, including higher US interest rates, geopolitical instability, and increased regulation, as contributors to Meta’s revenue slowdown. He stated that the company must prepare for the possibility of this economic reality continuing for many years.
The announcement of the job cuts follows similar moves by other tech giants such as Amazon and Google, who have closed tens of thousands of positions. According to layoffs.fyi, a platform that monitors job losses in the tech industry, there have been over 128,000 tech job cuts in 2023.
According to a memo from Meta CEO Mark Zuckerberg to staff, the recruitment team will be the first to learn whether they will be impacted by the job cuts, with the information being communicated to them on Wednesday.
Zuckerberg also outlined the timeline for informing other teams: “We expect to announce restructurings and layoffs in our tech groups in late April 2023, and then our business groups in late May 2023.” He added that in some cases, it could take until the end of the year to complete these changes, and the timelines for international teams would differ.
Big tech companies are experiencing lay-offs due to falling ad revenues and less valuable ad space. Meta, one of the giants in the sector, is facing a “perfect storm” and is planning to cut 10,000 jobs.
It is interesting to note that the recruitment team will be the first to find out whether they are affected by the cuts. Silicon Valley firms have a reputation for over-recruiting to handle sudden growth and retain top talent.
However, it seems that these luxuries are no longer affordable. Mark Zuckerberg’s bet on the metaverse is also a risk for Meta, as it could either make or break the company.
Mr. Zuckerberg stated that no new staff would be recruited until the restructuring was complete. He aimed to make the company “flatter” by “removing multiple layers of management.” Hybrid work was also a topic in his message.
Mr. Zuckerberg’s statement that software engineers who joined Meta in person performed better than those who joined remotely indicates that hybrid work will be scrutinized during the “year of efficiency.”
According to him, “On average, engineers in the early stages of their careers perform better when they work in-person with their teammates for at least three days a week.”
Mr. Zuckerberg further mentioned that they are focusing on understanding this and finding ways to ensure that people establish the necessary connections to work effectively.
Meanwhile, he encouraged everyone to find more opportunities to work with their colleagues in person.