Meta is cutting jobs in an effort to recover from losses and invest in the “metaverse.”
Meta Platforms has announced it will cut an additional 10,000 jobs in a second round of mass layoffs as the Big Tech industry braces for a deep economic downturn.
Facebook’s parent company said on Tuesday it will reduce the size of its recruiting team and make further cuts in its tech groups at the end of April, then in its business groups at the end of May.
Meta is embarking on a broader restructuring that will also see the US-based company scrap hiring plans for 5,000 positions, cancel lower-priority projects and flatten layers of middle management.
“This is going to be tough and there’s no escaping it,” CEO Mark Zuckerberg said in a message to staff. “It means saying goodbye to talented and passionate colleagues who have been part of our success.”
Zuckerberg said he believed “this new economic reality will last for many years.”
Concerns about an economic downturn due to rising interest rates have led to a series of massive job cuts in corporate America: from Wall Street banks like Goldman Sachs and Morgan Stanley to Big Tech companies including Amazon and Microsoft.
Meta, which is investing billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in ad spending from companies worried about the economic outlook.
Early last month, the company posted declining profits and its third consecutive quarter of declining revenues.
In response, Zuckerberg pledged to make 2023 the “Year of Efficiency”. With the latest move, Meta expects spending to reach between $86 billion and $92 billion in 2023, down from the previously forecast $89 billion to $95 billion.
Shares of the company rose 6 percent in early trading on news of the widely expected job cuts.
“While I’ve talked about efficiency this year, I’ve said that part of our work will be job removal – and that will serve both to build a leaner, more tech-savvy company and to enhance our improve business performance to support our long-term vision,” said Zuckerberg.
In November, Meta cut its workforce by 11,000 in the first mass layoffs in its 18-year history. The workforce was 86,482 at the end of 2022, 20 percent more than a year ago.
Meta and other tech companies have been aggressively hiring for at least two years, but have begun letting some of those employees go in recent months.
The tech industry has laid off nearly 290,000 workers since early 2022, with about 40 percent coming this year, according to layoff tracking sites.
This month, Amazon halted construction on its second headquarters in Virginia, USA, following the largest round of layoffs in the company’s history and shifting plans for remote work.
Twitter has also cut jobs en masse since the social media platform was bought by Elon Musk for $44 billion last year.
The latest cut of about 200 jobs last month saw the company’s workforce fall to less than 2,000, according to the New York Times.
The paper found that Twitter was losing advertisers since Musk took over, with ads accounting for more than 90 percent of the company’s revenue.