Meta, the owner of Facebook and Instagram, said Tuesday it plans to lay off about 10,000 employees, or about 13 percent of its workforce, the latest move in what company founder Mark Zuckerberg has called a “year” of efficiency .”
The layoffs will impact Meta’s recruiting team this week, with a reorganization of the technology and business groups due to take place in April and May, Mr Zuckerberg said in a memo posted on the company’s website. The announcement is the company’s second round of cuts in the past six months. In November, Meta laid off more than 11,000 employees, or about 13 percent of its workforce at the time.
Meta also plans to close about 5,000 vacancies, Mr. Zuckerberg said in the memo. Other restructuring efforts include a plan to complete this summer an analysis of Meta’s hybrid return-to-office model, which it tested last March.
“This is going to be tough and there’s no getting around it,” he wrote.
Meta’s stock rose more than 6 percent after the layoffs were announced.
Mr. Zuckerberg is cutting employees after years of hiring at breakneck speed. His company gobbled up employees as his family of apps, which includes WhatsApp, became popular around the world. The coronavirus pandemic has also accelerated the use of mobile apps and led to more growth. At its peak last year, Meta had 87,000 full-time employees.
Layoffs at Big Tech
Several tech companies are now retreating after a pandemic hiring wave.
- A growing list: Alphabet, Microsoft and Zoom are among the latest tech giants to cut jobs amid concerns about a slowdown in economic activity.
- Foreclosure: The company announced it would lay off 10 percent of its workforce, a decision that appeared to go against the stated commitment of its co-founder and CEO Marc Benioff to its employees.
- New parents hit hard: At tech companies that have expanded paid parental leave in recent years, parents have felt the lash of mass layoffs particularly hard.
- Tech’s Generation Gap: Recent cuts have opened the eyes of young workers. But for older employees who witnessed the dot-com bust, it hardly came as a shock.
But as the global economy soured and digital advertising markets shrank over the past year, Mr. Zuckerberg began to put an end to the rampant growth. Meta trimmed staff perks. And after November’s layoffs, which primarily affected the lines of business and recruiting teams, Mr. Zuckerberg hinted at further cuts.
At an earnings call in February, the chief executive said he didn’t want the company to be cluttered with a layer of middle management or “managers running managers.” He said he took responsibility for last year’s layoffs and blamed the surge in employment on his zeal for scaling up early in the pandemic.
Meta’s layoffs are part of a wave of job cuts at the biggest tech companies. In recent months, Amazon, Google, Microsoft, Salesforce and others have also said they are cutting their ranks, and some of the companies have increased the number of employees they are laying off after initial announcements. Many of the companies indicate a challenging global economic environment for their actions.
But Meta also faces many challenges beyond the overall economic framework. Not only has it struggled with a slowdown in digital advertising, but also Apple’s privacy changes to its mobile operating system, which have limited Meta’s ability to collect data about iPhone users to help target ads. It also faces stiff competition from TikTok, which has grown in popularity in recent years. And regulators have stepped up efforts to rein in the company by pushing for new laws that would limit Meta’s data-gathering abilities.
Meta is also in the midst of a difficult transition to becoming a “metaverse” company, connecting people to an immersive digital world through virtual reality headsets and apps. Mr. Zuckerberg sees the Metaverse as the next-generation computing platform, so Meta has spent billions of dollars in the effort and reallocated employees to its Reality Labs division, which focuses on products for the Metaverse.
However, it’s unclear if people want to use Metaverse products. In recent months, the public has instead gravitated towards chatbots powered by artificial intelligence. Meta has been investing in AI for years, but hasn’t been the focus of conversations about the technology lately.
Staff have been preparing for more layoffs for months, watching with concern as Mr. Zuckerberg set out to recall what he felt was no longer necessary to run the company, current and former employees said. But the expectation was that he would take his favorite metaverse project lightly.
Some Meta employees affected by Tuesday’s announcement of the layoffs — particularly in the recruiting department — felt “punched in the gut,” according to current and former employees who have spoken to those at the organization.
“People are entering a job market that is the worst I’ve ever seen,” said Erin Sumner, a global head of human resources at DeleteMe, who was fired from Facebook in November. She said the staggering of Meta’s cuts over the next two months added to staff concerns.
“There’s a lot of uncertainty,” Ms. Sumner said. “There’s a lot of anger, and there’s the question that a lot of people ask, ‘How am I going to work for the next two months while I’m wondering if I’ll still have a job?'”
In his announcement on Tuesday, Mr. Zuckerberg outlined a vision to streamline the company by eliminating layers of management, ending lower-priority projects and realigning product teams with a focus on engineering.
To that end, Mr. Zuckerberg has halted efforts to build NFTs, or non-fungible tokens, a cryptocurrency-based initiative that has fallen out of favor in recent months. Many of Mr. Zuckerberg’s crypto initiatives in general have fallen by the wayside over the past nine months as the public became more skeptical of the market following the implosion of FTX, the cryptocurrency exchange.
In his note, Mr. Zuckerberg added that the moves were in response to global conditions, including increased regulation, geopolitical instability, higher interest rates and a slowing economy.
“The global economy has changed, competitive pressures have increased and our growth has slowed significantly,” he said. “We should prepare for the possibility that this new economic reality will continue for many years to come.”
Gregory Schmidt contributed to the reporting.
