Meta plans to begin large-scale layoffs this week, according to people familiar with the matter, in what could be the biggest recent cut in tech jobs after the industry’s rapid growth during the pandemic.
The layoffs are expected to affect several thousand employees, and the announcement is due to come as soon as Wednesday.
Meta reported that it had more than 87,000 employees at the end of September, and company officials had already called on employees to cancel non-essential travel early this week.
The planned layoffs will be the first broad staff cuts to occur in the company’s 18-year history, and although smaller on a percentage basis than last week’s cuts at Twitter, which affected about half of that company’s employees, the expected number of Meta employees is That they lose their jobs may be the biggest yet at a major tech company in a year, which has seen the tech industry shrink.
A Meta spokesperson declined to comment, referring to CEO Mark Zuckerberg’s recent statement that the company “will focus its investments on a small number of high-priority growth areas.”
“This means that some teams will grow purposefully, but most others will remain flat or shrink over the next year, either at roughly the same size, or even a slightly smaller organization than we are today,” he said on a call about the company’s third-quarter earnings on October 26.
Last September, Meta was planning to cut expenses by at least 10% in the coming months, in part by cutting staff, and the cuts are expected to be announced this week after several months of targeted staff cuts in which staff have been managed or their roles are abolished.
“Realistically, there might be a bunch of people in the company that shouldn’t be here,” Zuckerberg told employees at a company-wide meeting at the end of June, and Meta, like other tech giants, went on a hiring spree during the pandemic, as life turned and online business, which added more than 27,000 employees in 2020 and 2021 combined and added an additional 15,344 employees in the first nine months of this year — about a quarter of that during the last quarter.
Last month, investment firm Altimeter Capital said in an open letter to Zuckerberg that Meta should cut staff and scale back its casual ambitions, reflecting growing discontent among shareholders.
Meta expenses have also risen sharply, causing free cash flow to drop 98% last quarter. And to target ads with fewer data.
But much of the inflated Meta costs stem from Zuckerberg’s commitment to Reality Labs, a division of the company responsible for virtual and augmented reality headsets as well as creating the metaverse.
This effort has cost the company $15 billion since the beginning of last year. But despite heavy investment in promoting its virtual reality platform, Horizon Worlds, users have not been largely affected.
And last month, the number of visitors to Horizon Worlds over the course of a year has fallen to less than 200,000 users, the size of Sioux Falls, S.D.
“I understand that a lot of people would disagree with this investment,” Zuckerberg told analysts about the company’s earnings call last month before reaffirming his commitment. “I think people will look back decades from now and talk about the importance of the work that has been done here,” after the call, the analysts lowered their rating for Meta stock and lowered price targets.
“The management’s roadmap and justification for this strategy continue to not resonate with investors,” analysts at RBC Capital Markets said in a note last month.