Updated on January 9, 2023 12:50 PM
According to sources familiar with the matter, meta is considering massive layoffs that might affect "thousands" of employees. The layoffs could begin as soon as Wednesday. Mark Zuckerberg, CEO of Meta, stated that the social media giant's employees could be reduced next year. Another area of emphasis for the corporation was rationalising workplace space.
The parent firm of Facebook and Instagram had approximately 87,000 employees at the end of September, but these "large-scale" layoffs are expected to affect a significant chunk of the workforce.
The layoffs could be even more damaging to Meta than Twitter's mass layoffs, which affected around half of the company's 7,500 employees.
For example, Meta's stock price had fallen by more than 70%. In the third quarter, revenue fell 4%, but costs and expenses increased 19% yearly to more than $22 billion. Furthermore, operating income dropped 46% yearly to $5.66 billion.
Meta's operating margin fell to 20% in the third quarter, down from 36% the previous year, while overall net income fell 52% to $4.4 billion. The corporation was said to be tightening its cost control and monitoring headcount in the aftermath.
Meta declined to comment on the situation but pointed to Zuckerberg's comments,
"In 2023, we're going to focus our investments on a small handful of high-priority development areas."
On its third-quarter earnings last month, Zuckerberg said,
"While some clubs will grow significantly, most other teams will remain flat or diminish during the following year." Overall, we plan to end 2023 as around the same size, if not somewhat smaller, as we are today."
In June, Meta's chief product officer Chris Cox issued a "serious times" warning, emphasising that employees must "perform perfectly in a context of slower growth."
Around the same time, Meta CEO Mark Zuckerberg began to turn up the heat on employees, saying, "There are definitely a handful of individuals at the firm who shouldn't be here."
In September, Zuckerberg announced a hiring freeze and warned that the company would be forced to reduce shortly.
Despite Zuckerberg's claim that Facebook has more active users than ever, investors remain apprehensive about the company's high-risk bet on the Metaverse.
Meta's virtual reality division lost $3.7 billion in the most recent quarter and $9.4 billion this year, while the company's stock is trading at its lowest level since 2016.
Horizon Worlds, Meta's social virtual reality platform, saw fewer than 200,000 monthly logins, much less than the planned 500,000 MAUs. The company's aim has recently been reduced to 280,000.
Meta is not the only one struggling with the harsh macroeconomic environment. Twitter has even more layoffs. Following Elon Musk's messy takeover, the microblogging site laid off nearly half its workers, including CEO Parag Agrawal, CFO Ned Segal, and legal affairs and policy leader Vijaya Gadde.