Meta could cut thousands of jobs in new round of layoffs, report says

The jobs cuts are reportedly being driven by financial targets

Meta has reported a slowdown in advertising revenue. Reuters
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Meta, the parent company of Facebook and Instagram, is planning a new round of job cuts as soon as this week, with “thousands” of employees expected to be affected, according to a report.

The latest round of layoffs is being driven by financial targets, Bloomberg reported on Monday, citing sources.

It is separate from the “flattening” that the company has been carrying out by offering buyout packages to managers and removing non-essential teams, the report said.

The latest phase of layoffs could be finalised within the next week, the sources said.

In November, Meta announced its first mass layoffs amid declining revenue, with roles in the technology sector most affected.

The company laid off 11,000 employees — equal to 13 per cent of its workforce, with chief executive Mark Zuckerberg apologising and taking the blame for the company's decline in revenue after disappointing earnings in October.

“I’ve decided to reduce the size of our team … we are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through the first quarter,” Mr Zuckerberg said at the time.

Meta, which has reported a slowdown in advertising revenue and has shifted focus to its virtual reality platform Metaverse, has been asking directors and vice presidents to make lists of employees that can be let go, the report said.

Last month, the social media company reported a 55 per cent annual drop in fourth-quarter net profit, underpinned by escalating costs and a decrease in the average price per advertisement.

Meta earned a net profit of more than $4.6 billion in the quarter that ended on December 31.

Its revenue dropped by 4.4 per cent annually to more than $32.1 billion in the three months to December. It was the company’s third straight quarter of declining sales.

Meta, which employs 86,482 people, expects its March quarter total sales to be in the range of $26 billion to $28.5 billion, it said.

Companies across the technology sector have been slashing their workforces after boosting hiring at the height of the Covid-19 pandemic, amid rising interest rates and growing fears of a recession in US.

Amazon, Microsoft, Google's parent Alphabet, Yahoo and Spotify are among the companies that have cut thousands of jobs in recent months.

US employers announced 102,943 job cuts in January, a fivefold increase on an annual basis and a 136 per cent increase from December, according to Chicago employment company Challenger, Gray & Christmas.

The technology sector cut 41,829 jobs, accounting for 41 per cent of the total in January, a massive increase compared with the 72 cuts announced in January 2022.

“Since November 2022, which saw the highest monthly total for the sector since Challenger began tracking in 1993 … technology companies have announced 110,793 job cuts,” the report said.

“We’re now on the other side of the hiring frenzy of the pandemic years,” said Andrew Challenger, labour expert and senior vice president of Challenger, Gray & Christmas.

“Companies are preparing for an economic slowdown, cutting workers and slowing hiring.”

Updated: March 07, 2023, 4:15 AM