Facebook-parent Meta Platforms said yesterday it would cut 10,000 jobs, the first Big Tech company to announce a second round of mass layoffs as the industry braces for a deep economic downturn.
The widely anticipated job cuts are part of a wider restructuring that will also see the company scrap hiring plans for 5,000 openings, cancel lower-priority projects and flatten layers of middle management.
“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” Chief Executive Mark Zuckerberg said in a message to staff, according to a Reuters report yesterday.
Worries of an economic downturn due to rising interest rates have sparked a series of mass nob cuts across corporate America: from Wall Street banks such as Goldman Sachs and Morgan Stanley to Big Tech firms, including Amazon.com and Microsoft.
Meta, which is pouring billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from companies worried about the economic outlook.
In response, Zuckerberg has promised to turn 2023 into the “Year of Efficiency“. With the latest move, Meta expects expenses in 2023 to come in between $86 billion and $92 billion, lower than the $89 billion to $95 billion forecast previously.
Zuckerberg said Meta will remove multiple layers of management, ask managers to become individual contributors and give them less than 10 direct reports, which would in turn make the organization “flatter”.
“We don’t expect to grow headcount as quickly, it makes more sense to fully utilize each manager’s capacity and defragment layers as much as possible,” he said.
Meta’s move in November to slash headcounts by 11,000 marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at 2022-end, up 20 percent from a year ago.
The tech industry has laid off nearly 290,000 workers since the start of 2022, with about 40 percent of them coming this year, according to layoff-tracking site layoffs.fyi.
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