On Tuesday, Meta made an announcement that it would lay off an additional 10,000 workers and face restructuring costs between $3 billion to $5 billion. CEO Mark Zuckerberg cautioned that economic instability could persist for a “number of years.” Despite the news, Meta’s shares finished Tuesday up by 7%.
According to a message from CEO Mark Zuckerberg to Meta employees. The company plans to announce restructuring plans in the coming months, which will include flattening organizational structures, canceling lower-priority projects, and reducing hiring rates. In addition, Meta plans to close 5,000 open roles that haven’t yet been filled. Zuckerberg acknowledged the continued economic uncertainty and cautioned. That the company should prepare for the possibility that it will continue for several years.
Meta has also filed with the SEC, stating that it expects lowered total expenses for 2023. Ranging from $86 billion to $92 billion. This announcement comes after the company’s previous round of layoffs in November, which affected over 11,000 workers, equivalent to about 13% of the company’s overall staff.
Zuckerberg has stated that 2023 will be the company’s “year of efficiency,” with the aim of becoming a stronger and more agile organization. As part of the restructuring, the number of direct reports each manager has will be increased, and the focus will be on building technology that benefits people.
During a meeting with analysts in February, Zuckerberg mentioned that. Meta intends to cut projects that are underperforming or are no longer critical. And also reduce middle management layers to accelerate decision-making. In his message to employees, he highlighted that a leaner organization would be able to execute its top priorities more quickly.
Despite the cost-cutting measures, Meta is still investing billions of dollars into developing virtual reality and augmented reality technologies. To construct the metaverse – a digital universe that aims to connect people in new ways. The company’s Reality Labs division is responsible for creating the metaverse. Recorded a loss of approximately $13.7 billion in 2022, despite generating revenue of $2.16 billion.
Several other companies have also recently announced substantial workforce reductions. Twilio, Dell, Zoom, and eBay are among them. In January, Google disclosed plans to lay off over 12,000 employees. While Microsoft revealed plans to cut 10,000 workers, and Salesforce announced its intention to cut 7,000 jobs. These cost-cutting measures by companies in various sectors are a response to the challenges and uncertainties of the economic climate.
