Facebook Parent Meta prepares to announce massive layoffs to employees this week

Meta platforms Inc.

Meta 2.11%

It plans to begin massive layoffs this week, the biggest round yet, according to people familiar with the matter Recent Tech Job Cuts After the rapid growth of the industry during the pandemic.

Layoffs are expected to impact Many thousands of employees And the announcement is scheduled to come on Wednesday, according to people. Meta reported more than 87,000 employees at the end of September. Company officials have already told employees to cancel non-essential travel starting this week, the people said.

The planned layoffs are the first broad cuts in the company’s 18-year history. Twitter Inc. Smaller on a percentage basis than last week’s cuts Half of the company’s employees were attackedThe number of meta employees expected to lose their jobs at a major tech company in a year could be huge. Tech-industry downsizing.

CEO Mark Zuckerberg recently said, ‘Some teams will grow meaningfully, but most other teams will be flat or shrink over the next year.’


Michael Nagle/Bloomberg News

A spokeswoman for Meta declined to comment, citing the chief executive

Mark ZuckerbergA recent statement said the company would “focus our investments on a limited number of high-priority growth areas.”

“So some teams will grow meaningfully, but most other teams will be flat or shrink over the next year,” he said of the company. Third quarter earnings Call on October 26. “Overall, we expect to end 2023 with roughly the same size or even a slightly smaller system than today.”

The Wall Street Journal reported in September that Meta plans to cut costs by at least 10% in the coming months, in part through layoffs.

The cuts are expected to be announced this week after several months More targeted staff reductions In which employees were managed or their roles were eliminated.

At a company-wide meeting at the end of June, Mr. “Realistically, there may be people in the company who shouldn’t be here,” Zuckerberg said.

Like other tech companies, hiring took place during the pandemic as life and business shifted more and more online. It added more than 27,000 employees in 2020 and 2021, and added 15,344 more in the first nine months of the year — about a quarter of the most recent quarter.

of Meta The stock fell more than 70% This year. The company highlighted worsening macroeconomic trends, but investors were spooked by its spending and threats to the company’s core social media business. Growth for that business has stalled in many markets amid stiff competition from TikTok

Apple Inc

Need that Users choose monitoring Their devices have reduced the ability of social media platforms to target ads.

Last month, investment firm Altimeter Capital, Mr. In an open letter to Zuckerberg, Meta said it would cut staff. Back off its metaverse ambitionsReflecting growing dissatisfaction among stakeholders.

Meta’s costs have also risen sharply, causing its free cash flow to drop 98% in the most recent quarter. Some of the company’s costs stem from heavy investments in additional computing power and artificial intelligence needed to further optimize short-form video platforms like Reels on Instagram, Meta’s TikTok, and target ads with less data.

But most of Metta’s ballooning costs are due to Mr. are obtained by Zuckerberg Commitment to Reality Labs, a division of the company responsible for the development of virtual and augmented reality headsets and metawares. Mr. Zuckerberg described the metaverse as a collection of interconnected virtual worlds in which people will eventually work, play, live and shop.

Meta has invested heavily in developing its virtual-reality platform, but users are largely unimpressed.


Guillermo Gutierrez/Zuma Press

The effort has cost the company $15 billion since its inception last year. But despite investing heavily in developing its virtual-reality platform Horizon Worlds, users are largely unimpressed. Last month, the journal Horizon World reported a year-over-year drop in visitors For less than 200,000 usersSize of Sioux Falls, ST

“I understand a lot of people will disagree with this investment,” Mr. Zuckerberg told analysts on the company’s earnings call last month before reaffirming his commitment. “I think people are going to look back decades from now and talk about the importance of the work that was done here.”

After the call, analysts downgraded Meta’s stock and cut price targets.

“Management’s roadmap and rationale for this strategy have not consistently resonated with investors,” analysts at RBC Capital Markets said in a note last month.

Write to Jeff Horwitz at [email protected] and Salvador Rodriguez at [email protected]

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