After Twitter, Meta, the parent company of Facebook, is also planning on joining the ‘massive layoff club’ as they have notified 87,000 employees that they are planning on letting go of thousands of employees by next year. However, it seems that Facebook is going above and beyond its bird rival with thousands of possible cut-offs. Sources familiar with the matter have reported that the layoffs could begin as soon as Wednesday this week. The notification to those 87,000 employees said;
“In 2023, we’re going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”
According to other sources, Meta is planning to begin large-scale layoffs this week instead of next year, in what could be the largest round in a recent spate of tech job cuts after the industry’s rapid growth during the pandemic. The layoffs are expected to affect many thousands of employees and an announcement is planned to come as soon as Wednesday, according to the people. Meta reported more than 87,000 employees at the end of September. Company officials already told employees to cancel nonessential travel beginning this week, the people said.
If Meta decides to go through the lay-off, it would be the first broad head-count reductions to occur in the company’s 18-year history. While smaller on a percentage basis than the cuts at Twitter Inc. this past week, which hit about half of that company’s staff, the number of Meta employees expected to lose their jobs could be the largest to date at a major technology corporation in a year that has seen a tech-industry retrenchment.
Meta’s chief product officer Chris Cox hinted at this move back in June this year, warning employees of “serious times” and that they must “execute flawlessly in an environment of slower growth.” A Facebook layoff is the only way for the company to survive.
Company CEO Mark Zuckerburg was far more direct about Facebook’s approach on the matter. An internal Q&A session showed that the executive said “there are probably a bunch of people at the company who shouldn’t be here.” He also halted hirings around two months ago and warned that the company could downsize in the near future.
A spokesman for Meta declined to comment, referring to Chief Executive Mark Zuckerberg’s recent statement that;
“The company would focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. The company’s third-quarter earnings call on Oct. 26. “In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”
The real reason behind the Facebook layoff is that the tech giant went on a hiring spree during the pandemic as life and business shifted more online. It added more than 27,000 employees in 2020 and 2021 combined and added a further 15,344 in the first nine months of this year—about one-fourth of that during the most recent quarter.
Meta’s stock has fallen more than 70% this year. The company has highlighted deteriorating macroeconomic trends, but investors have also been spooked by its spending and threats to the company’s core social-media business. Growth for that business in many markets has stalled amid stiff competition from TikTok, and Apple Inc.’s requirement that users opt into the tracking of their devices has curtailed the ability of social media platforms to target ads.
Altimeter Capital, an investment company, said in an open letter to Mr. Zuckerberg that Meta should slash staff and pare back its metaverse ambitions, reflecting the rising discontent among shareholders. Meta’s expenses have also risen sharply, causing its free cash flow to decline 98% in the most recent quarter. Some of the company’s spending stems from heavy investments in the additional computing power and artificial intelligence needed to further develop Reels, Meta’s TikTok-like short-form video platform on Instagram, and to target ads with fewer data.
