Meta plans a second round of layoffs of 10,000 employees amid difficult global economic conditions.
About 10,000 people, or about 13% of Meta’s workforce, will be laid off as part of the company’s latest effort to honor what founder Mark Zuckerberg called the “Year of Efficiency.”
According to a memo posted on the company’s website, the layoffs will affect Meta’s hiring team, with the technology and business units scheduled for restructuring in April and May.
The announcement is the second layoff the company has made in the past six months. About 11,000 employees, or about 13% of employees at the time, were laid off by Meta in his November.
The company has announced it will lay off 11,000 people in less than six months, but the restructuring will leave an additional 5,000 open vacancies unfilled and closed.
How difficult this is and there is no getting around it, Facebook founder Mark Zuckerberg wrote in a blog post. The restructuring measures announced over the next few months will flatten the organization, shut down low-priority initiatives and reduce hiring rates.
Meta’s hybrid office return strategy, which began testing in March, will also be subject to analysis over the summer, among other restructuring initiatives.
of restructuring According to Zuckerberg, the net result is greater organizational efficiency, significantly improved developer productivity and tooling, optimized distributed work, redundant operations for garbage collection, and more.
He turned his attention to issues such as managers overseeing a small number of employees and initiatives that, in his opinion, were not justified by the administrative burden required to support them.
Lean organizations will get their most important tasks done faster, he continued. Increased productivity makes people work harder and have more fun. They draw in the most skilled individuals with even greater force.
To keep all companies as lean as possible, the company is focused on canceling redundant or low-priority initiatives in its efficiency year, he added.
According to Zuckerberg’s memo, the company’s efforts to help engineers work wherever they want could be reversed.
Early studies of performance data showed that engineers who first joined Meta in person before switching to remote work, or those who joined in person, performed better overall than those who joined remotely, he said. rice field. Studies show that engineers who work face-to-face with their colleagues at least three days a week perform better, on average.
A research note released earlier this month by analyst Jeffries suggested further layoffs. They believe additional job cuts are necessary to make up for the over-hiring of the past two years, the statement added.
After years of rapidly hiring employees, Zuckerberg is now laying them off.
His business has eaten away at its employees as a suite of apps, including WhatsApp, has gained global popularity. The coronavirus pandemic has greatly accelerated the adoption of mobile apps and spurred further development.
Since the start of the Covid pandemic, a significant number of employees have come and Meta has expanded to 87,000 people worldwide at its peak in 2022.
But last year, as the global economy deteriorated and the digital advertising market shrank, Zuckerberg began to put an end to unbridled growth. Meta cut employee benefits. Additionally, Zuckerberg said future job cuts are likely to follow November’s layoffs, which primarily affected business units and recruiting teams.
On the February earnings call, the chief executive said he didn’t want the business to have too many layers of middle management, or “managers who manage managers.” He claimed responsibility for last year’s layoffs, blaming his eagerness to hire more people as usage surged early in the pandemic.
In its SEC filing, Meta now says it expects total costs for the full calendar year 2023 to be in the range of $86 billion to $92 billion, up from a previous estimate of $89 billion. Down from $95 billion.
The company estimates restructuring costs, including facility consolidation, severance and other personnel costs, will be in the range of $3 billion to $5 billion.
Meta reports fourth quarter 2022 revenue of $32.17 billion, down 4% year-over-year. (On a constant currency basis, the company claimed that its fourth-quarter earnings were up 2%.) Costs were up 22% year-on-year, but net income fell 55% to 4.65 billion. million dollars.
The layoff announcement sent Meta’s share price up significantly, up 5.82% since the start of trading amid market volatility caused by the failure of three technology-focused banks.
Meta and other tech giants
Job cuts announced by the biggest tech giant include layoffs at Meta. Amazon, Google, Microsoft, Salesforce, and others have all said they are laying off workers in recent days, with some companies slowing down the number of employees they will lay off after making initial statements. are increasing.
Over 100,000 IT workers have been laid off in the first three months of 2023, according to a tally of sources. This includes 12,000 across Google’s parent company, Alphabet, 2,000 at PayPal, 18,000 at Amazon, and 10,000 at Microsoft. Elon Musk’s acquisition of Twitter in his October has resulted in a flurry of job cuts and the layoff of hundreds of Twitter employees.
The difficult global economic situation has been highlighted as a reason for action by many companies.
But even outside the macroeconomic environment, Meta faces multiple challenges. The improved privacy of Apple’s mobile operating system, combined with the decline in digital advertising, has made it more difficult for companies to gather information about iPhone customers to target advertising.
TikTok, which has skyrocketed in popularity over the past few years, is another fierce competitor for the company. Meanwhile, authorities are calling for new regulations to limit Meta’s data collection capabilities in order to control it.
Meta’s transition to a “metaverse” business that uses virtual reality headgear and apps to connect users to an immersive digital world is challenging.
Zuckerberg believes the Metaverse will be the next-generation computing platform, so the company is investing significant resources in the project and redeploying staff to its Reality Labs division, which is responsible for developing products for the Metaverse.
Still, it’s not yet clear whether users will be attracted to Metaverse products. These days, the public tends to prefer artificial intelligence-based chatbots. Meta has long been an AI investor, but recent discussions around the technology have not put him at the forefront.
In his announcement, Zuckerberg outlined a strategy for restructuring the company. This includes removing superfluous layers of management, closing non-critical projects, and redeploying product teams to focus on engineering.
To achieve this, Zuckerberg stopped working on creating Non-Fungible Tokens (NFTs), a cryptocurrency-based project that has fallen out of favor recently. After the collapse of the cryptocurrency exchange FTX, the general public grew wary of the sector and much of Zuckerberg’s crypto efforts were abandoned.
Employees have been preparing for further layoffs for months as Zuckerberg embarked on a mission to downsize what he believed was no longer necessary to run the company, according to current and former employees. I’ve been Still, it was to be expected that he would approach his favorite Metaverse project sparingly.
Erin Sumner, Global Director of Human Resources at DeleteMe and former Facebook employee, believes people are entering the worst job market they’ve ever seen. She argued that the way Meta’s layoffs take place over her next two months increases staff stress.
According to Sumner, there are many uncertainties. She added that many people are asking how companies can expect someone to work for the next two months as they wonder if the job will last.
Edited and proofread by nikita sharma