- By Tom Gergen
- Technical Reporter
Meta, which owns Facebook, Instagram and WhatsApp, has announced plans to cut 10,000 jobs.
Meta Chief Executive Mark Zuckerberg said the cuts would be “difficult” as part of “efficiency”.
He told employees that apart from 10,000 job cuts, 5,000 vacancies will remain unfilled in the company.
In a note, Mr Zuckerberg told staff he believed the company had experienced “a humbling awakening” in 2022 when it experienced a dramatic slowdown in revenue.
Meta previously reported a 4% year-on-year drop in revenue in the three months to December 2022 – although it still managed to make more than $23bn in profits in 2022.
Mr Zuckerberg cited higher interest rates in the US, global geopolitical instability and increased regulation as some of the factors affecting Meta and contributing to the slowdown.
“I think we have to prepare ourselves for the possibility that this new economic reality will continue for years,” he said.
The latest job cuts come as companies including Google and Amazon struggle with how to balance cost-cutting measures with the need to remain competitive.
Earlier this year, Amazon announced plans to cut more than 18,000 jobs due to an “uncertain economy” and rapid hiring during the pandemic, while Google’s parent company Alphabet made 12,000 cuts.
According to layoffs.fyi, which tracks job losses in the tech industry, there have been more than 128,000 job cuts in the tech industry so far in 2023.
Timeline for cuts
Mr Zuckerberg said he would be the first to say whether the recruitment team had been affected by the cuts and would find out on Wednesday.
He also outlined when other teams would be notified: “We will announce restructuring and layoffs in our technology teams in late April 2023, and then our business teams in late May 2023,” he wrote. In a memo to employees Tuesday.
“For a small number, it may take until the end of the year to complete these changes.
“Our timelines for international teams will also be different and local leaders will follow up with more details.”
Unfortunately, we’re used to hearing about major tech layoffs as industry giants continue to tighten their belts.
Many people like Metta earn most of their money from advertising. Now they face a perfect storm: falling ad revenue from companies that have to pay their own bills, and a user base with less money to spend, making existing ad space less valuable.
It’s interesting to note that Meta is looking to its recruiting team in the latest round of cuts.
I often hear that Silicon Valley companies have a tendency to over-recruit for two reasons. First, they have staff ready to handle sudden growth, which can happen (look at Tik Tok). And, secondly, to retain people who are considered “top tech talent” who don’t want to work for their competitors.
Both are luxuries that are no longer affordable.
Meta has the added risk of being Mark Zuckerberg’s colossal gamble in the metaverse as The Next Big Thing. If he’s right, his company will regain its crown, but if he’s wrong, the $15bn+ dollars he’s spent so far will disappear in a puff of mixed truth smoke.
Mr Zuckerberg said there would be no new hires until after the restructuring was complete and aimed to “flatter” the company by “removing many layers of management”.
He devoted part of his letter to hybrid work. Software engineers who joined Meta in person fared better than those who joined remotely, he said, adding that hybrid jobs will be under scrutiny in the current “potential year.”
“Engineers earlier in their careers performed better on average when they worked face-to-face with teammates at least three days a week,” Mr Zuckerberg wrote.
“We’re focused on understanding this more and finding ways to ensure people make the connections they need to be effective.
“In the meantime, I encourage all of you to find more opportunities to work in person with your colleagues.”