Meta chief executive officer (CEO) Mark Zuckerberg is aiming to reduce costs and increase efficiency by cutting 10,000 jobs in the following months.
The social media giant, worth $469 billion, announced its second round of job cuts within four months on Tuesday.
This new reduction follows the November announcement which saw approximately 13 per cent of its workforce, or 11,000 jobs, cut — the largest layoff in the company's history.
Zuckerberg announced on the blog that Meta will restructure in the upcoming months by reducing hiring rates, cancelling lower-priority projects, and closing 5,000 open positions.
The new cuts highlight Zuckerberg's efforts to manage Meta's finances due to the economic slowdown impacting its earnings.
Zuckerberg acknowledged that the world economy's transformation, increased competitive pressure, and reduced growth significantly impacted the company.
He stated that the company should be ready for the long-term continuation of this new economic reality.
Zuckerberg announced that recruiting teams are the first division to be affected by the cuts, starting on Wednesday. Tech groups will be hit late April, and business groups in late May.
The completion of these changes may take until year-end, as stated by him, in a few instances.
The company has been hit by a recent wave of senior leadership departures, which has contributed to internal uncertainty.
On Monday, Nada Stirratt, vice-president of sales for the Americas at Meta, resigned, and Marne Levine, the chief business officer, departed in February.
According to three sources, Stirratt's resignation has been confirmed.
Meta's layoffs are a result of investor frustration with the company's large employee count and Zuckerberg's multibillion-dollar investment in the "metaverse".
Team budgets have been frozen in preparation for anticipated cuts. Promotions to director level have also been put on hold for certain teams, causing low morale and disruption internally, according to multiple insiders.
"Chaos is creating a dilemma in talent management, affecting advancement and compensation," a senior staffer revealed.
Meta, like other ad-dependent businesses, has faced a decline due to harsh macroeconomic conditions and competition from competitors like TikTok.
Zuckerberg has also switched the company's emphasis to building a digital metaverse, which involves investing $10 billion a year but is unlikely to be profitable anytime soon.
In February, Facebook parent company Meta revealed plans to focus on "efficiency", targeting ineffective projects and streamlining middle management for more agile decision-making.
Some managers have been asked to transition to "individual contributor roles" or leave the company altogether to support this initiative.
Meta also owns Instagram and WhatsApp.
Meta's head of fintech, Stephane Kasriel, announced on Twitter that the company will no longer offer digital collectibles, or non-fungible tokens, and instead will prioritise supporting creators, people, and businesses.
Wall Street will welcome the announced cuts. Meta's positive fourth-quarter results have already seen an increase of 18 per cent in share value, equivalent to $88 billion in market worth.
Analysts from Jefferies equity research highlight the need for further reductions in headcount to counteract the previous two years of excessive hiring.
After the November layoffs, employees are facing a second round of cuts that are causing delays and low motivation in finishing projects.
Zuckerberg's announcement of the cuts being rolled out over months has left many frustrated and feeling stuck in limbo, according to a staff member.
As you are no doubt aware, Swarajya is a media product that is directly dependent on support from its readers in the form of subscriptions. We do not have the muscle and backing of a large media conglomerate nor are we playing for the large advertisement sweep-stake.
Our business model is you and your subscription. And in challenging times like these, we need your support now more than ever.
We deliver over 10 - 15 high quality articles with expert insights and views. From 7AM in the morning to 10PM late night we operate to ensure you, the reader, get to see what is just right.
Becoming a Patron or a subscriber for as little as Rs 1200/year is the best way you can support our efforts.