Facebook parent company has declared 2023 to be “the year of efficiency,” in an effort to enhance financial performance and meet long-term objectives.
Meta Platforms Inc. announced plans to layoffs 10,000 employees and fill an additional 5,000 open roles as part of its second major round of job cuts in six months, consisting of 10,000 layoffs overall.
Meta layoffs 10,000 Jobs
Facebook parent company has declared 2023 as “the year of efficiency,” in an effort to boost financial performance and meet long-term objectives. As part of these reforms, Meta is flattening the organization, cancelling lower priority projects and slowing hiring, Chief Executive Officer Mark Zuckerberg revealed in a statement on Tuesday. Bloomberg previously reported cuts were coming; in November alone the world’s largest social networking company laid off 11,000 staffers – or 13% of its staff.
Facebook Inc. recently revised their 2023 expense guidance downward from $89 billion to $92 billion, taking into account job cuts and other cost-saving measures. This figure is down from an earlier estimate of between $89 billion and $95 billion; it includes around $3 billion to $5 billion in restructuring expenses including severance pay.
Employees had been bracing for additional layoffs in recent weeks. Mark Zuckerberg has spoken publicly about the need to prioritize projects and investments more effectively, possibly leading to additional job cuts. Meta began its flattening process earlier this year by eliminating some middle managers and encouraging others to return to individual contributor roles rather than managing others.
Mark Zuckerberg acknowledged that his announcement may still come as a shock. At 11:20 a.m. in New York City, shares of Facebook were up 5.3% at $190.45.
According to a company statement, they anticipate announcing restructurings and layoffs in tech groups by late April, as well as business units by late May. With less hiring overall, Mark Zuckerberg also revealed plans to reduce the size of their recruiting team.
The company, which owns Instagram and WhatsApp, has experienced a slowdown in advertising revenue, leading to its first ever annual sales decline in 2022. Mark Zuckerberg has shifted Meta’s focus and investment over the past year towards virtual reality technology and the metaverse – which he envisions as being the next major computing platform.
Meta’s employee numbers grew rapidly during the Covid-19 pandemic as demand for its digital services skyrocketed and Mark Zuckerberg took advantage of it. Their headcount grew 30% in 2020, during the first year of the crisis; then 23% the following year (2021). By November 2018, when Meta began cutting jobs, they had over 87,000 workers on staff.
Meta is looking to optimize its engineer-to-others ratio, according to Mark Zuckerberg. To do this, Meta plans on investing in tools like artificial intelligence that will aid code writers and make it “most effective over many years, not just this year.”
Meta plans to simplify its organization by eliminating multiple layers of management and asking many managers to be contributors as well. Generally, the company does not want managers to have more than 10 direct reports; however, many currently only have a few, according to Mark Zuckerberg.
Facebook was one of the first tech companies to offer employees telecommuting privileges during the pandemic, but Mark Zuckerberg now encourages his staff to “find more chances to collaborate in person.” Other tech giants such as Twitter Inc., Apple Inc. and Amazon.com Inc have all begun calling employees back into the office at least some days a week, reversing earlier policies which were more lax.
Menlo Park, California-based company is cutting staff as workers experience increased anxiety and low morale among colleagues. Yet Mark Zuckerberg’s focus on efficiency has been well received by Wall Street; Meta stock has gained nearly 58% since the start of this year.
Mark Zuckerberg noted that many companies would cut back their long-term vision and investments due to the current economic downturn, but “Meta has the unique opportunity to be bolder and make decisions other companies cannot,” he said. “So we created a financial plan which allows us to invest heavily in the future while still delivering sustainable results if we run each team more efficiently. These changes will enable us to meet this financial plan.”