Facebook parent Meta is laying off another 10,000 people and is closing off another 5,000 open roles as part of their restructuring plans for their “Year of Efficiency.”
Mark Zuckerberg shared an update with Meta employees about the future of the company, and what it aims to achieve under the expanse of efficiency.
- This followed a previous round of layoffs announced in November, which affected over 11,000 employees, or nearly 13 percent of the company’s workforce.
- The first wave of layoffs will start this week, followed by a second wave for tech groups in April, and finally the business groups in late May.
- “My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead,” said Zuckerberg in the memo to employees.
What got us here: These job cuts come as a result of one of the biggest financial falls for a big tech company ever.
- Analysts noted how quickly the company hired staff during the pandemic, ballooning from 48,000 to 87,000 before the November layoffs. It was perceived as an attempt to seize the pandemic trends of outsized revenue growth.
- Wall Street analysts described Meta’s earning reports for 2022 as a train wreck, with the company plunging over $700 billion in market value.
- Meta has also been pouring billions into Zuckerberg’s dream of the metaverse, with the company’s Reality Labs unit posting a $13.7 billion loss in 2022.
- Zuckerberg called the collapse in Meta’s growth last year “a humbling wake-up call,” following the admission that the CEO mistakenly predicted the post-pandemic acceleration as a permanent boom.
The first round of layoffs came under the “need to become more capital efficient,” as the company looked to course through the plunging economy.
- Besides the obvious goals of improving financial performance, Meta expects to conduct changes with the aim of working more efficiently — with the two major principles of the restructuring being “flatter is faster” and “leaner is better.”
“We should prepare ourselves
for the possibility that this
new economic reality will
continue for many years.”
- According to an SEC filing, Meta’s newest wave of job cuts will put its expenses for 2023 in the range of $86-92 billion, down from the previously expected $89-95 billion.
- It also notes that the restructuring will cost about $3-5 billion, including severance, facilities consolidation charges, and other personnel costs.
- In his memo, Zuckerberg notes that the company will be canceling lower-priority projects. Just a day prior, the company had announced that it would be winding down support for NFTs on Facebook and Instagram.
Following the announcement, Mark Zuckerberg faced thousands of employees in a meeting at the Meta Town Hall — a transcript of which was received by The Washington Post.
- The Meta boss was asked how employees are expected to trust the company’s leadership after two rounds of massive job cuts.
- Another employee questioned how Meta’s workers could be productive with the looming threat of being laid off.
- Zuckerberg noted how he didn’t anticipate a second round of cuts for the “foreseeable future,” while acknowledging that announcing the layoff plans ahead of time can create a period of uncertainty.
Zuckerberg doesn’t seem close to giving up on his plans for the metaverse — and it seems to be costing the company dips in revenue and massive job cuts.
- He teases increased attention toward product development, with a focus on “returning to a more optimal ratio of engineers to other roles.”
- The company is looking at a long road ahead, with an increasing focus on joining the race for building effective AI tools.
U.S. employees affected by these layoffs will receive 16 weeks of severance pay along with two additional weeks for every year they worked at the company. Employees outside the U.S. will be receiving similar support, the company said.