Facebook’s parent company, Meta, announced that it will cut 10,000 additional jobs and employees this year as the company continues with its restructuring.
Meta’s second round of layoffs is coming in the face of an impending economic meltdown.
Meta shares spiked by 6% on the announcement. The massive worker layoff is part of a restructuring that will see the company scrap hiring plans for 5,000 openings, take off lower-priority projects and “flatten” layers of middle management.
Meta’s first mass layoff, saw about 11,000 employees lose their jobs. This translated to about 13% of its workforce at the time, after a hiring spree that doubled the number of employees it had as of 2020.
Worries about an economic downturn due to rising interest rates have sparked a series of mass job cuts across corporate America in recent times. Tech companies have led the way, with over 290,000 workers since the beginning of 2022, according to tracking site Layoffs.fyi.
Meta has continued to lay off its workforce as its CEO continues to lose millions of dollars in his bid to create a booming Metaverse.
“Virtual reality is an expensive business to be in, so while (Meta) maps out a path through an uncertain landscape, it needs to find efficiencies elsewhere”, said Hargreaves Lansdown analyst Susannah Streeter.
In a message to staff on Tuesday, Mark Zuckerberg said most of the new cuts would be announced in the next two months, though in some cases they would continue till the end of the year.
“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. But last year was a humbling wake-up call.”
“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.”
Meta also will remove multiple layers of management roles and ask many managers to become individual contributors, while eliminating non-engineering roles, automating more functions, and trying to reverse a commitment to “remote-first” work that Zuckerberg made amid COVID-19 pandemic lockdowns.
