Meta to cut 10,000 workers in second round of layoffs
Meta is cutting an additional 10,000 employees, an unprecedented second round of massive layoffs in the wake of an advertising downturn and a costly bet on the metaverse that has cost the social media company billions of dollars.
CEO Mark Zuckerberg said 5,000 open roles also wouldn’t be filled in a staff memo posted publicly on Tuesday. The parent company of Facebook, Instagram and WhatsApp previously laid off around 11,000 workers in November.
With 21,000 total layoffs, Menlo Park-based Meta has made the deepest cuts of any tech company during the pandemic, now exceeding Amazon’s roughly 18,000 cuts.
“This will be tough and there’s no way around that,” Zuckerberg said, thanking affected employees. “As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs
— and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision.”
Zuckerberg telegraphed more belt tightening in the year to come during the company’s February earnings report, writing to investors that “our management theme for 2023 is the ‘Year of Efficiency’ and we’re focused on becoming a stronger and more nimble organization.”
Meta’s stock jumped Tuesday at the news of the additional layoffs, closing nearly $7 per share above its opening price, and up roughly $70 per share so far this year.
Unemployment rates rose throughout the Bay Area in January as many tech companies shed staff, with San Francisco’s rate jumping to 2.8% from 2% in February. California’s workforce lost 5,000 information sector jobs, which are primarily tech companies, that month.
The latest figures show the national unemployment rate edging up to 3.6% in February, depicting a relatively healthy labor market overall, despite the ongoing tech layoffs, looming fears of a recession and concerns about the stability of the national banking sector amid the implosion of Silicon Valley Bank.
The most recent unemployment report showed strong job gains in the leisure and hospitality, retail and health care sectors, while employment declined in the information industry, which includes tech, along with transportation and warehousing.
The layoffs will hit recruiting, tech, business and international teams and may take until the end of the year to complete, Zuckerberg said.
The company has yet to send WARN notices to the California Employment Development Department, that agency said, which companies must file under state law when they cut 50 or more jobs during a 30 day period. Companies are also required to give worker’s 60 day’s notice. During recent rounds of tech layoffs some companies have pushed out affected employees’ finals days months in the future to comply.
The company saw its advertising revenue drop during the final quarter of last year to $31.2 billion, from $32.6 billion during the same period in 2021. CFO Susan Li said during the company’s most recent earnings call that “revenue remained under pressure from weak advertising demand, which we believe continues to be impacted by the uncertain and volatile macroeconomic landscape.”
That is despite the company estimating that 2.96 billion people worldwide used at least one of what it calls its “family of apps” on a daily basis as of December.
Major changes rolled out by Apple that make it harder for Meta’s apps to track users’ internet browsing activity, used by Meta to target ads, has also made it more difficult for the company’s core revenue generator.
Li said the company is “continuing to make progress in mitigating the impact from the ... change. But this is more generally just the reality of the online advertising environment that we operate in now.”
Meta’s workforce was 86,482 people at the end of 2022, up 20% from the prior year and nearly double the company’s size before the pandemic in 2019.
The two rounds of layoffs are expected to reduce the company’s head count to around 65,000 workers.
The company’s costcutting efforts include reducing office space, which includes a massive 435,000-square-foot sublease listing at 181 Fremont St. in San Francisco that is one of the biggest single vacancies in the city.