Meta kickstarts “Year of Efficiency” by laying off another 10,000 employees. What’s next?
- Facebook-parent Meta Platforms is be the first Big Tech company to be laying off thousands of employees for the second time.
- Meta is also closing around 5,000 additional open roles that they have yet to hire.
- The company said its restructuring exercise might take until the end of the year.
Meta is not done laying off employees, and at the time of writing, the company is preparing to let go of another 10,000 employees. After all, CEO Mark Zuckerberg indicated last month that he is planning to further streamline his company’s business this year, especially after Meta Platforms reported mixed results for the fourth quarter of 2022.
The company laid off approximately 11,000 employees in the final quarter of 2022. Zuckerberg said restructuring efforts—including costs related to employee severance, the early termination of office leases, and data center restructuring—cost it US$4.2 billion in Q4. Unfortunately, Meta is still not done — with neither cost-cutting nor layoffs.
Zuckerberg told investors he was focused on “continuing to streamline the company” during its earnings call on February 1, saying the management theme for 2023 is “the year of efficiency”. Therefore, in a rather unsurprising move, the owner of Facebook and Instagram said on Tuesday that it plans on laying off about 10,000 employees.
The move makes Meta the only Big Tech company to go for a second round of layoffs at a large scale, impacting roughly 13% of its workforce. “Here’s the timeline you should expect: over the next couple of months, organization leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates,” Zuckerberg said in a blog post yesterday.
Who is Meta laying off?
Zuckerberg said he has also made the “difficult decision” to further reduce the size of Meta’s recruiting team. “We will let recruiting team members know tomorrow whether they’re impacted,” he added. Meta is also expected to announce restructurings and layoffs in their tech groups in late April, followed by their business groups in late May.
“In a small number of cases, completing these changes may take through the end of the year. Our timelines for international teams will also look different, and local leaders will follow up with more details,” Zuckerberg said. Overall, Meta will be laying off around 10,000 people and close around 5,000 open roles that they have yet to hire. While the moves will be tough, Meta’s CEO said, “there’s no way around that.” Overall, Meta’s goals for its Year of Efficiency is to make itself a better technology company and improve its financial performance in a difficult environment to execute its long-term vision.
After their year-long restructuring, Meta plans to lift hiring and transfer freezes in each group. As part of its Year of Efficiency, the company focuses on returning to a more optimal ratio of engineers to other roles. Zuckerberg said Meta is also preparing for the possibility that the current 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 innovation costs. Given this outlook, we’ll need to operate more efficiently than our previous headcount reduction to ensure success,” he added.
In retrospect, the lay offs come after years of Meta hiring at a breakneck pace. At its peak last year, Meta had 87,000 full-time employees. However, the plunging global economy and contracting digital advertising markets last year was a wake-up call. That was when Zuckerberg started putting an end to Meta’s unchecked growth.
Zuckerberg may just dwell in his metaverse and discuss with his avatars what’s next.