Meta, the company that owns Facebook, Instagram, and WhatsApp, says it will cut 10,000 jobs.
It will be the second time the tech giant fires a lot of people at once. Last November, 11,000 people lost their jobs.
Mark Zuckerberg, the CEO of Meta, said that the cuts, which are part of a “year of efficiency,” would be “tough.”
In addition to the 10,000 jobs that will be cut, he told staff that the company will also leave 5,000 jobs open.
In a memo to employees, Mr. Zuckerberg said that he thought the company had gotten “a humbling wake-up call” in 2022 when its revenue dropped dramatically.
Meta had said before that its earnings in the three months leading up to December 2022 were down 4% from the same time the year before. However, it still made more than $23bn in profit over the course of 2022.
Mr. Zuckerberg said that Meta was slowing down because of things like higher interest rates in the US, instability in international politics, and more rules.
He said, “I think we should get ready for the possibility that this new economic reality will last for a long time.”
Companies like Google and Amazon have been trying to figure out how to cut costs while still staying competitive. This has led to the latest round of job cuts.
At the beginning of this year, Amazon said it would cut more than 18,000 jobs due to “the uncertain economy” and the fact that it had hired a lot of people quickly during the pandemic. Google’s parent company, Alphabet, also cut 12,000 jobs.
Layoffs.fyi, a site that keeps track of job cuts in the tech industry, says that more than 128,000 jobs have been lost so far in 2023.
Timeline for cuts
Mr. Zuckerberg said that the people on the recruitment team would find out on Wednesday if they would be affected by the layoffs.
He also said when other teams would be told. “We expect to announce restructurings and layoffs in our tech groups at the end of April 2023, and then in our business groups at the end of May 2023,” he wrote in a memo to staff on Tuesday.
“In a few cases, these changes might not be finished until the end of the year.
“Our schedules will also look different for international teams, and local leaders will follow up with more information.”
We’re starting to get used to hearing about layoffs at big tech companies, as they continue to tighten their belts.
Most of the money for sites like Meta comes from ads. Now, they’re facing a perfect storm: falling ad revenue from companies that need to pay their own bills and a user base with less money to spend, which makes the value of existing ad space go down.
In the latest round of layoffs, it’s interesting to see that Meta is looking to its recruitment team.
I often hear that companies in Silicon Valley tend to hire too many people. There are two reasons for this. First, so that they have enough staff to deal with sudden growth, which can happen (just look at TikTok). And secondly, to keep the people they think are “top tech talent” from going to work for their competitors.
Both seem to be nice things that people can no longer afford.
Meta also has to worry about Mark Zuckerberg’s big bet that the metaverse will be The Next Big Thing. If he’s right, his company will get its crown back, but if he’s wrong, the $15 billion or more he’s already spent on it could vanish in a puff of mixed reality smoke.