Meta, formerly known as Facebook, is planning major job cuts that could affect thousands of workers this week, according to a report from The Wall Street Journal.
The alleged layoff by Meta is expected to be the largest in the company’s history amidst rising costs and a recent collapse of the company’s share price. Sources familiar with the situation claim the layoffs could begin as soon as Wednesday.
Mark Zuckerberg, founder and CEO of the company, hinted at the impending layoffs in a Facebook post during the earnings call last month on 26 October 2022.
“In 2023, we’re going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organisation than we are today,”
Mark Zuckerberg, Facebook Founder
At the end of September, the parent company of Facebook and Instagram reported having around 87,000 employees, but these “large-scale” layoffs are anticipated to reduce that number significantly.
According to the WSJ, the layoffs could hit Meta even harder than the mass job cuts at Twitter, which affected about half of the company’s 7,500-employee workforce.
The report is coming only a week after the social media platform reported its third-quarter earnings, which missed revenue expectations and saw a rise in operating costs. Shares of Meta are presently trading at $90.79, down 7.56% over the previous five days and 73.19% year-over-year, according to Yahoo Finance. Its stock price also suffered.
According to reports, the company is struggling with the market downturn made worse by significant investments in its metaverse business and a weak holiday quarter that affected Meta’s revenue, erasing $67 billion from its stock market value.
This altogether adds to the more than half a trillion dollars in value already lost this year.
The company declined to comment on the situation but referred to the statement released by Mark Zuckerberg during the earnings call last month.
Read also: Verified Twitter users to pay $8 monthly subscription, AWS launches Lagos office
Meta’s earlier warnings to employees
In June, Meta’s chief product officer Chris Cox warned employees of “serious times,” noting that employees must “execute flawlessly in an environment of slower growth.”
Afterwards, the heat on employees was turned up by Zuckerberg around the same time, when he mentioned in an internal Q&A session obtained by The Verge’s Alex Heath, that “there are probably a bunch of people at the company who shouldn’t be here.” The CEO later implemented a hiring freeze in September and warned that the company could downsize soon.
It appears that Meta has the support of several investors, notably Altimeter, which demanded a reduction in the approximately 87,000 employees the business now employs in an open letter to Mark Zuckerberg. The investor also thinks that Meta’s spending and shift toward the metaverse have impacted investors’ confidence.
Despite Zuckerberg’s claim that the social network has more active users than ever, investors are still worried about Facebook’s expensive bet on the metaverse. The virtual reality division of the company lost $3.7 billion in the most recent quarter and $9.4 billion overall this year, and the company’s stock is currently trading at its lowest level since 2016.
The company appears to be actively hiring into its metaverse division regardless, with its list of job openings revealing 38 of its 413 listings related to augmented reality and virtual reality.
Read also; Meta collaborates with Nigeria’s top creators to flex in the Metaverse
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