Facebook’s parent company, Meta Platforms, plans to lay off thousands of employees this week, reported The Wall Street Journal (WSJ) on Sunday (6 Nov).
Source: Pay Space Magazine
Citing people familiar with the matter, WSJ reported that layoff announcements could come as soon as Wednesday (9 Nov).
This news comes after Meta forecasted a weak holiday quarter and high costs in the coming year. The costs will add to the over S$700 billion (US$500 billion) already lost this year.
People familiar with the matter revealed that Meta Platforms is planning to begin large-scale layoffs this week.
This is expected to affect thousands of its current 87,000 employees. An announcement is to come as soon as Wednesday (9 Nov).
Employees have also been instructed to cancel non-essential travels at the start of the week.
According to WSJ, the planned layoffs will be the first broad headcount reduction in the company’s 18-year history.
The tech industry is being hit hard after its rapid growth during the pandemic and has seen high retrenchment rates this year.
Last week, Twitter laid off about half of its staff before rolling back on some of its decisions.
While Meta layoffs are expected to be a smaller percentage of the company compared to Twitter, it will be the largest number of layoffs in a major technology corporation to date.
In October, Meta forecasted a weak Q4 and significantly more costs in 2023.
These will take about S$94 billion (US$67 billion) off Meta’s stock market value. This year alone, Meta’s stock has fallen more than 70%.
While Meta’s expenses have increased sharply due to heavy investments in developing Reels and targeted ads, the highest costs stem from Reality Labs.
Reality Labs is a division of the company responsible for virtual and augmented-reality headsets as well as the creation of the metaverse.
According to WSJ, these efforts have cost the company S$21 billion (US$15 billion) since the start of 2021.
Reuters reported that Meta is also facing slowing global economic growth, competition from TikTok, privacy changes from Apple, and the threat of regulation.
A spokesperson from Meta declined to comment when asked about the impending layoffs, reported WSJ.
They instead referred to Chief Executive Mark Zuckerberg’s recent sharing that the company will focus investments on a “small number of high-priority growth areas”.
Source: Wired
He made the comment on 26 Oct, explaining that it meant some teams would grow while others would shrink over the next year.
At that time, Mr Zuckerberg said Meta plans to end 2023 with roughly the same size or slightly smaller organisation.
He expects metaverse investments to pay off in about a decade.
Before then, he has been made to freeze hiring, shutter projects, and reorganise teams to cut costs.
In June, Meta scrapped plans to hire engineers by at least 30%.
Mr Zuckerburg had also warned employees to brace for an economic downturn.
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Featured image adapted from Pay Space Magazine.
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