Los Angeles Times

Meta will cut about 10,000 jobs, close 5,000 openings

- By Kurt Wagner Wagner writes for Bloomberg.

Meta Platforms plans to lay off about 10,000 employees and close about 5,000 open roles in its second major round of job cuts in the last six months.

Facebook’s parent company is embarking on a “year of efficiency” to improve its financial performanc­e and achieve longer-term goals.

As part of those efforts, Meta is flattening the organizati­on, canceling lowerprior­ity projects and slowing hiring, Chief Executive Mark Zuckerberg said in a statement Tuesday.

The world’s largest social networking company in November laid off 11,000 people, or 13% of its staff.

Meta lowered its outlook for 2023 expenses to a range of $86 billion to $92 billion, accounting for the job reductions and other costcuttin­g measures.

That’s down from $89 billion to $95 billion previously, according to a company filing, and includes $3 billion to $5 billion in restructur­ing costs, including severance.

Meta employees had been bracing for more layoffs in recent weeks.

Zuckerberg has been outspoken about the need to better prioritize projects and investment­s and has hinted at additional job cuts. Meta began its flattening process earlier this year, eliminatin­g some middle managers and asking others to return to individual contributo­r roles instead of overseeing other employees.

Even so, Zuckerberg said that “this update may still feel surprising.” Shares gained 7.3% to $194.02 at the close in New York, the highest price in more than eight months.

The company expects to announce restructur­ings and layoffs in tech groups in late April, and business groups in late May, according to the statement. With less hiring overall, Zuckerberg said he’s also reducing the size of the recruiting team.

The company, which also owns Instagram and WhatsApp, has seen a slowdown in advertisin­g revenue, leading to its first-ever annual sales decline in 2022. Zuckerberg has shifted Meta’s focus and investment in the last year to virtual reality technology and the so-called metaverse, which he envisions as the next major computing platform.

Meta’s employee ranks expanded dramatical­ly during the COVID-19 pandemic as demand for the company’s digital services increased and Zuckerberg leaned into the moment.

The social media giant’s head count grew 30% in 2020, the first year of the pandemic, and then 23% in 2021. By the time Meta starting eliminatin­g jobs in November, the company had more than 87,000 employees.

As part of its efficiency plan, Meta is focusing on returning to a “more optimal ratio of engineers to other roles,” Zuckerberg said.

The company will invest in tools, such as those in artificial intelligen­ce to help engineers write code faster, to make it “most effective over many years, not just this year.”

To flatten the organizati­on, Meta will remove multiple layers of management and will ask many managers to be contributo­rs too. In general, the company doesn’t want its managers to have more than 10 direct reports, but today many have only a few, Zuckerberg said.

Meta’s $3-billion operating-expense reduction for 2023 “is likely aimed at aligning expenses to top-line growth,” Bloomberg Intelligen­ce’s Mandeep Singh and Damian Reimertz wrote. “We believe a major focus of this second round of layoffs will be in R&D.”

During the pandemic, Facebook was one of the first tech companies to offer all of its employees the ability to work from home.

But Zuckerberg is now encouragin­g his staff to “find more opportunit­ies to work with your colleagues in person.” Other tech companies including Twitter, Apple, and Amazon.com have also begun calling employees back to the office at least a few days a week, walking back earlier policies that were more lenient.

As the Menlo Park, Calif.based company pares staff, workers have described heightened anxiety and low morale among colleagues.

But Zuckerberg’s focus on efficiency has been well received by Wall Street. Meta’s stock has gained nearly 58% since the beginning of the year.

Newspapers in English

Newspapers from United States