Meta Platforms announced 10,000 job cuts on Tuesday, becoming the first Big Tech company to announce a second round of mass layoffs as the industry braces for a severe economic downturn.
On the news, Meta shares rose 6%. The widely anticipated job cuts are part of a larger restructuring in which the company will cancel hiring plans for 5,000 openings, cancel lower-priority projects, and flatten layers of middle management.
“I believe we should brace ourselves for the possibility that this new economic reality will persist for many years,” CEO Mark Zuckerberg said in a message to employees.
Meta, which is investing billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from businesses concerned about the economy.
In response, Zuckerberg has promised to turn 2023 into the “Year of Efficiency”. Meta now expects expenses in 2023 to be between $86 billion and $92 billion, down from the $89 billion to $95 billion previously forecast.
According to Zuckerberg, Meta will eliminate multiple layers of management, ask managers to become individual contributors, and give them fewer than ten direct reports, making the organisation “flatter.”
“We don’t expect to grow headcount as quickly; it’s more important to fully utilise each manager’s capacity and defragment layers as much as possible,” he explained.
Meta’s decision to lay off 11,000 employees in November marked the company’s first mass layoffs in its 18-year history. Its headcount stood at 86,482 at the end of 2022, up 20% from the previous year.
According to the layoff-tracking website layoffs.fyi, the tech industry has laid off nearly 290,000 workers since the beginning of 2022, with roughly 40% of them coming this year.
