- By Tom Gerken
- Technology reporter
Meta, owner of Facebook, Instagram and WhatsApp, has announced that it will cut 10,000 jobs.
Meta chief executive Mark Zuckerberg said the cuts would be “heavy” and part of a “year of efficiency.”
In addition to the 10,000 jobs lost, 5,000 vacancies remain unfilled at the company.
Mr. Zuckerberg told staff in a memo that he believed the company experienced “a humble wake-up call” in 2022 as it saw a revenue slowdown.
Meta previously announced that profits fell 4% year over year in the three months to December 2022, though it still managed to post a profit of more than $23 billion over the course of 2022.
Mr. Zuckerberg cited higher interest rates in the US, global geopolitical instability and increased regulation as some of the factors impacting Meta.
“I think we need to prepare for the possibility that this new economic reality will continue for many years to come,” he said.
The cuts come as companies like Google and Amazon grapple with how to balance cost-cutting measures with the need to stay competitive.
Early this year, Amazon announced it planned to close more than 18,000 jobs due to “the uncertain economy” and rapid hiring amid the pandemic, while Google’s parent company, Alphabet, cut 12,000 jobs.
According to layoffs.fyi, which tracks job losses in the technology sector, more than 128,000 jobs have been cut in the technology sector so far in 2023.
Timeline for cuts
Zuckerberg said the recruiting team would be the first to hear if they were affected by the cuts, and would find out on Wednesday. He also outlined when other teams would know about their future.
“We expect to announce restructuring and layoffs in our technology groups by the end of April 2023, and then our corporate groups by the end of May 2023,” he wrote in a memo to employees on Tuesday.
“In a small number of cases, it may take until the end of the year to complete these changes.
“Our timelines for international teams will also look different, and local leaders will provide more details.”
Unfortunately, we are getting used to hearing about major tech layoffs as the giants tighten their belts. Many like Meta make most of their money from carrying ads.
And now they’re facing a perfect storm of declining ad revenue from companies having to pay their own bills and a user base with less money to spend, making existing ad space less valuable.
It’s interesting to note that Meta is looking at its recruiting team in the latest round of cuts.
I often hear that Silicon Valley companies tend to over-hire for two reasons. First, so that they have staff ready to handle sudden massive growth, which can happen (just look at TikTok), and second, to hire and retain those they consider to be “top technology talent”, and whom they do not want to work for them. rivals instead. Both are luxury items, it seems, that are no longer affordable.
Meta has the added risk of Mark Zuckerberg’s huge bet on the metaverse being The Next Big Thing. If he’s right, his company will get its crown back, but if he’s wrong, the $15 billion+ dollars he’s spent on it so far could vanish in a cloud of mixed reality.
Reducing management and hybrid working
Mr Zuckerberg said there would be no new hires until the restructuring was complete, saying he aimed to “flatten” the company by “removing multiple layers of management”.
He also devoted some of the correspondence to hybrid work, saying that software engineers who joined Meta in person outperformed those who joined remotely – indicating that this would change as part of the company’s “year of efficiency” .
“Engineers early in their careers perform better on average when they work face-to-face with teammates at least three days a week,” he added.
“We are focused on understanding this further and finding ways to ensure people are building the connections they need to work effectively.
“In the meantime, I encourage all of you to seek out more opportunities to work with your colleagues in person.”
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