Tough times ahead? Meta likely to cut significant jobs this week

CEO Mark Zuckerberg had said in July that the company was facing one of the 'worst downturns that we’ve seen in recent history'

Meta plans to lay off employees this week, three people with knowledge of the situation said, adding that the job cuts were set to be the most significant at the company since it was founded in 2004.

It was unclear how many people would be cut and in which departments, said the people, who declined to be identified because they were not authorized to speak publicly. The layoffs were expected by the end of the week. Meta had 87,314 employees at the end of September, up 28% from a year ago.

Meta has been struggling financially for months and has been increasingly clamping down on costs. The Silicon Valley company, which owns Facebook, Instagram, WhatsApp and Messenger, has spent billions of dollars on the emerging technology of the metaverse, an immersive online world, just as the global economy has slowed and inflation has soared.

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At the same time, digital advertising — which forms the bulk of Meta’s revenue — has weakened as advertisers have pulled back, affecting many social media companies. Meta’s business has also been hurt by privacy changes that Apple enacted, which have hampered the ability of many apps to target mobile ads to users.

Last month, Meta posted a 50% slide in quarterly profits and its second-straight sales decline. The company said at the time that it would be “making significant changes across the board to operate more efficiently,” including by shrinking some teams and by hiring only in its areas of highest priority.

Meta CEO Mark Zuckerberg had added that most “teams will stay flat or shrink over the next year.” He said the company would “end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

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The Wall Street Journal earlier reported Meta’s plans for layoffs this week.

Zuckerberg has been signaling tougher times ahead for months. In July, he told employees that the company was facing one of the “worst downturns that we’ve seen in recent history” and that workers should prepare to do more work with fewer resources. Their performances would also be graded more intensely than previously, he said.

“I think some of you might decide that this place isn’t for you, and that self-selection is OK with me,” Zuckerberg told employees in a call at the time. “Realistically, there are probably a bunch of people at the company who shouldn’t be here.”

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Meta joins other tech companies that have been laying off employees as economic conditions have grown more challenging. Tech companies boomed during the coronavirus pandemic, but many of the largest firms reported financial results in recent weeks that showed they were feeling the impact of global economic jitters.

On Friday, Elon Musk, the world’s richest man and the new owner of Twitter, laid off half of the company’s staff. On Thursday, Lyft said it would cut 13% of its employees, or about 650 of its 5,000 workers. Stripe, a payment processing platform, said it would cut 14% of its employees, roughly 1,100 jobs. Snap, Robinhood and Coinbase are among other companies that have announced job cuts this year.

Other tech companies are freezing their hiring. On Thursday, Amazon said it had decided to pause incremental corporate hiring because the economy was “in an uncertain place.” The move added to a freeze from last month, when the e-commerce giant halted corporate and technology hiring in its retail business for the rest of the year.