Meta to lay off 10,000 employees in second round of job cuts

Facebook parent company will also close about 5,000 open roles that have yet to be filled, CEO says

Meta team members will find out on Wednesday whether they will be affected by the latest job cuts, Mark Zuckerberg said. Reuters

Meta, the parent company of Facebook, Instagram and WhatsApp, will lay off 10,000 employees as part of a new round of job cuts and will also close about 5,000 open roles that have yet to be filled, the company's founder and chief executive Mark Zuckerberg has said.

The cuts, which have been widely anticipated, will be carried out over the next couple of months and will cover tech, business and recruitment teams.

The move is aimed at improving efficiency at the company, as it grapples with declining advertising revenue amid fears of an economic slowdown.

“Org [organisation] leaders will announce restructuring plans focused on flattening our orgs, cancelling lower-priority projects and reducing our hiring rates,” Mr Zuckerberg said in a statement on Tuesday.

“With less hiring, I’ve made the difficult decision to further reduce the size of our recruiting team. We will let team members know tomorrow whether they’re impacted.

“We expect to announce restructurings and layoffs in our tech groups in late April, and then our business groups in late May. In a small number of cases, it may take through the end of the year to complete these changes.”

The timetables for international teams will also look different, he said.

“This will be tough and there’s no way around that,” Mr Zuckerberg added.

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 Mr Zuckerberg apologising and taking the blame for the company's decline in revenue after disappointing profit in October.

Meta has been hit by a decrease in advertising revenue and has shifted focus to its virtual-reality platform, the metaverse.

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.

The company expects its March quarter total sales to be in the range of $26 billion to $28.5 billion, it said.

Meta had a headcount of 86,482 people as of December 31, 2022, an increase of 20 per cent year on year.

“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products,” Mr Zuckerberg said.

“But last year was a humbling wake-up call. The world economy changed, competitive pressures grew, and our growth slowed considerably. We scaled back budgets, shrunk our real estate footprint and made the difficult decision to lay off 13 per cent of our workforce.

“At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.

“Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility and increased regulation leads to slower growth and increased costs of innovation.

“Given this outlook, we’ll need to operate more efficiently than our previous headcount reduction to ensure success.”

Since the company reduced its workforce last year, “one surprising result is that many things have gone faster”, the chief executive said.

The social media company also plans to become “flatter” by removing several layers of management. As part of this, many managers will be asked to become individual contributors.

“Our single largest investment is in advancing AI and building it into every one of our products. We have the infrastructure to do this at unprecedented scale,” Mr Zuckerberg 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 the 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 77,770 job cuts in February, a fivefold increase on an annual basis, according to Chicago employment company Challenger, Gray & Christmas.

In the first two months of this year, employers have announced plans to cut 180,713 jobs, the highest January-February total since 2009, the report said.

Technology companies cut the most jobs in February at 21,387, accounting for 28 per cent of the total layoffs.

The industry has slashed 63,216 jobs in the first two months of 2023, compared with 187 cuts announced in the same period last year.

“Certainly, employers are paying attention to rate increase plans from the Fed,” said Andrew Challenger, labour expert and senior vice president of Challenger, Gray & Christmas.

“Many have been planning for a downturn for months, cutting costs elsewhere. If things continue to cool, layoffs are typically the last piece in company cost-cutting strategies.”