- By Tom Gerken
- Tech Journalist
Meta, which owns Facebook, Instagram and WhatsApp, said it would cut 10,000 jobs.
Meta chief executive Mark Zuckerberg said the cuts would be “tough” and part of a “year of efficiency”.
In addition to the 10,000 jobs cut, 5,000 vacant positions in the company will remain vacant.
Mr Zuckerberg told staff in a memo that he believed the company suffered “a humiliating awakening” in 2022 when it saw a slowdown in revenue.
Meta previously reported that in the three months to December 2022, earnings were down 4% year-on-year – although it still managed to make over $23 billion in profit during 2022.
Mr. Zuckerberg cited higher interest rates in the United States, global geopolitical instability and increased regulation as some of the factors affecting Meta.
“I think we have to prepare for the possibility that this new economic reality will continue for many years to come,” he said.
The cuts come as companies such as Google and Amazon have grappled with how to balance cost-cutting measures with the need to stay competitive.
Earlier this year, Amazon announced it planned to cut more than 18,000 jobs due to the “uncertain economy” and rapid hiring during the pandemic, while Google’s parent company Alphabet proceeded to 12,000 deletions.
According to layoffs.fyi, which tracks tech job losses, there have been more than 128,000 job cuts in the tech industry so far in 2023.
Timeline of cuts
Mr Zuckerberg said the recruiting team would be the first to know if they were affected by the cuts and would find out on Wednesday. He also indicated when the other teams would be made aware of their future.
“We expect to announce restructuring and layoffs in our technology groups at the end of April 2023, and then in our business groups at the end of May 2023,” he wrote in a note to employees on Tuesday.
“In a small number of cases, it may take until the end of the year to complete these changes.
“Our schedules for international teams will also be different, and local leaders will follow with more details.”
Unfortunately, we’re getting used to hearing about big tech layoffs as the giants continue to tighten their belts. Many like Meta make most of their money from advertising.
And now they’re facing a perfect storm of declining ad revenue from companies with their own bills to pay and a user base that has less money to spend, making existing ad space less valuable. .
Interestingly, Meta turns to its recruiting team in the latest round of cuts.
I often hear that companies in Silicon Valley tend to over-recruit, for two reasons. Firstly, so they have staff ready to handle huge sudden growth, which can happen (just look at TikTok), and secondly, to hire and retain those they perceive as “top tech talent”, and that they don’t want to work for their rivals instead. Both are luxuries, it seems, that are no longer affordable.
Meta has the added risk that Mark Zuckerberg’s huge bet on the metaverse is The Next Big Thing. If he’s right, his company will regain its crown, but if he’s wrong, the $15 billion-plus he’s spent so far could vanish in a puff of mixed-reality smoke.
Reduce management and hybrid work
Mr Zuckerberg said there would be no new hires until the restructuring was complete, and said he aimed to make the company “flatter” by “removing multiple levels of management”.
He also devoted a section of the correspondence to hybrid working, and said that software engineers who joined Meta in person performed better than those who joined Meta remotely – indicating that this would change as part of “the ‘year of efficiency’ of the company.
“Early-career engineers do better on average when they work face-to-face with their teammates at least three days a week,” he added.
“We’re focused on understanding that and finding ways to make sure people make the connections they need to work effectively.
“In the meantime, I encourage you all to find more opportunities to work with your colleagues in person.”