Meta Platforms announced it would cut another 10,000 positions in a second round of mass layoffs as the Big Tech sector braces for an economic downturn.
The Facebook parent company announced Tuesday that it would reduce its size and make further cuts to its tech groups in April and May. It will then cut its business groups in May.
Meta was involved in a more significant restructuring. The United States-based company will cancel lower-priority projects, scrap hiring plans for 5,000 positions and flatten middle management.
In a message to workers, CEO Mark Zuckerberg stated, “This will be difficult, and there’s no other way around it.” It will be challenging to say goodbye to our talented and passionate colleagues, who have contributed so much to our success.”
Zuckerberg stated that he believes “this new economic reality” will continue for many years.
Fears of an economic downturn caused by rising interest rates have led to mass job cuts in corporate America. These include Wall Street banks like Goldman Sachs and Morgan Stanley and Big Tech companies like Amazon and Microsoft.
Meta, which has spent billions of dollars on the futuristic metaverse, needs help with a slump in advertising spending by companies concerned about the economic outlook.
The company reported falling profits last month and a third consecutive quarter with declining revenues.
Zuckerberg responded by promising to make 2023 the “Year of Efficiency”. Meta now expects expenses in 2023 will be between $86bn- $92bn. This is lower than the $89bn-$95bn previously forecast.
Early trading saw the company’s shares jump 6 per cent on the news about the anticipated job cuts.
Zuckerberg stated, “As I have talked about efficiency this past year, I have said that part of our work will include removing jobs – that will be in the service of both building an efficient, more technical company, and improving our business performance to support our long-term vision.”
Meta saw its workforce shrink by 11,000 during November’s first mass layoff in 18 years. The company’s total headcount was 86,482 as of the end of 2022, an increase of 20% over a year.
Meta and other tech companies include been hiring aggressively for at least two years, but in recent months, they have begun to let go of some of their workers.
According to layoff-tracking websites, the tech industry has lost nearly 290,000.
Amazon has halted construction of its Virginia headquarters after the most significant round of layoffs it has ever seen and its shifting plans regarding remote work.
Twitter also has had job cuts since Elon Musk bought the social media platform last year for $44bn.
According to the New York Times, the latest job cuts of around 200 workers brought the company’s total headcount to less than 2,000 employees.
Since Musk’s takeover, the newspaper discovered that Twitter had lost advertisers. Ads account for over 90% of the company’s revenue.