Facebook Parent Meta Is Preparing to Notify Employees of Large-Scale Layoffs This Week
Social-media giant’s planned cuts expected to affect many thousands of its workforce
Meta Platforms Inc. is planning to begin large-scale layoffs this week, according to people familiar with the matter, 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.
The planned layoffs 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.
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,” he said on 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 Wall Street Journal reported in September that Meta was planning to cut expenses by at least 10% in the coming months, in part through staff reductions.
The cuts expected to be announced this week follow several months of more targeted staffing reductions in which employees were managed out or saw their roles eliminated.
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Mr. Zuckerberg told employees at a companywide meeting at the end of June.
Meta, like other tech giants, 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, and added an additional 15,344 in the first nine months of this year—about a fourth of that in the most recent quarter.
Meta’s stock has fallen by more than 70% this year. The company has highlighted deteriorating macroeconomic trends, but investors have also been spooked by its high 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-in to the tracking of their devices has curtailed the ability of social-media platforms to target ads.
Last month, investment firm Altimeter Capital 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 by 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 less data.
But much of Meta’s ballooning costs stem from Mr. Zuckerberg’s commitment to Reality Labs, a division of the company responsible for both virtual and augmented reality headsets as well as the creation of the metaverse. Mr. Zuckerberg has billed the metaverse as a constellation of interlocking virtual worlds in which people will eventually work, play, live and shop.
The effort has cost the company $15 billion since the beginning of last year. But despite investing heavily in promoting its virtual-reality platform, Horizon Worlds, users have been largely unimpressed. Last month, the Journal reported that visitors to Horizon Worlds had fallen over the course of the year to well under 200,000 users, about the size of Sioux Falls.
“I get that a lot of people might disagree with this investment,” Mr. Zuckerberg told analysts on the company’s earnings call last month before reaffirming his commitment. “I think people are going to look back on decades from now and talk about the importance of the work that was done here.”
Following the call, analysts downgraded their rating of Meta’s stock and slashed price targets.
“Management’s road map & justification for this strategy continue to not resonate with investors,” analysts at RBC Capital Markets said in a note last month.
Interesting. Many of the younger people in IT (not just Facebook) are getting a lesson about something they never thought would happen: layoffs. In my neck of the woods we have been having a very hard time filling positions in software engineering, dev-ops, data base management, etc. I'm seeing many job offers being withdrawn and new positions being cancelled. This is not going to be a fun time for many people that were writing their own tickets a year ago. All that being said, Fuck Facebook and Fuck Zuckerberg.
Well I guess trees do not grow to the sky. Facebook has introduced so much toxicity into our culture. Cannot say that I was disappointed in any way. Maybe the prices of real estate in Menlo Park will drop. The former employees can probably find accomodations in the Castro district.
Posts: 17701 | Location: Stuck at home | Registered: January 02, 2015
It seems to be happening all over lately. Iowa grocery chain Hy-Vee just laid off most all of their marketing and IT departments (425 people) to outsource it all in India. Wells Fargo has been having small layoffs for over a year and just finished round 14 or so.
waiting for the left's outrage, vis a vis Twitter. Probably not. Zuckerberg is a golden boy to the left.
Men fight for liberty and win it with hard knocks. Their children, brought up easy, let it slip away again, poor fools. And their grandchildren are once more slaves.
-D.H. Lawrence
Posts: 11524 | Location: Fort Worth, Texas | Registered: February 07, 2007
If Some is Good, and More is Better.....then Too Much, is Just Enough !! Trump 2024....Make America Great Again! "May Almighty God bless the United States of America" - parabellum 7/26/20 Live Free or Die!
Posts: 9649 | Location: New Hampshire | Registered: October 29, 2011
Ironically, I don't think it's the introduction of toxicity into the culture that's causing it's financial problems. It likely the attempts to tone it down that increased their expenses (how many people did they hire to scan/sanitize their content), and cut their traffic volume.
quote:
Originally posted by ZSMICHAEL: Well I guess trees do not grow to the sky. Facebook has introduced so much toxicity into our culture. Cannot say that I was disappointed in any way. Maybe the prices of real estate in Menlo Park will drop. The former employees can probably find accomodations in the Castro district.
Originally posted by TomV: 87,000 employees sure sounds like a lot of extra bodies, for a company that really doesn't sell or service anything.
They are constructing a 1 million square foot data center, $800 million dollar project, just up the road from Beretta in Gallatin, TN. I have to question if a web site is worth such investment and why Gallatin?
Posts: 18018 | Location: The Bluegrass State! | Registered: December 23, 2008
Originally posted by TomV: 87,000 employees sure sounds like a lot of extra bodies, for a company that really doesn't sell or service anything.
They are constructing a 1 million square foot data center, $800 million dollar project, just up the road from Beretta in Gallatin, TN. I have to question if a web site is worth such investment and why Gallatin?
Cheaper electric rates, land cost, water rates? Thats why all the biggies have big server farms in Des Moines area. Driving up our electric rates. All while providing very few full time jobs.
"If you’re a leader, you lead the way. Not just on the easy ones; you take the tough ones too…” – MAJ Richard D. Winters (1918-2011), E Company, 2nd Battalion, 506th Parachute Infantry Regiment, 101st Airborne "Woe to those who call evil good, and good evil... Therefore, as tongues of fire lick up straw and as dry grass sinks down in the flames, so their roots will decay and their flowers blow away like dust; for they have rejected the law of the Lord Almighty and spurned the word of the Holy One of Israel." - Isaiah 5:20,24
