Meta Platforms Inc. said it would cut roughly 10,000 jobs over the coming months, the Facebook parent’s META 7.25%increase; green up pointing triangle second wave of mass layoffs in what it says is an effort to be more efficient in a difficult economy.
Meta Chief Executive Mark Zuckerberg said in an email to staff on Tuesday that the company would in the coming months conduct multiple rounds of job cuts, as well as cancel some projects and reduce hiring rates as part of what he has dubbed the “year of efficiency.”
Company recruitment teams will be cut first, followed by restructuring and layoffs in its technology groups in late April, Mr. Zuckerberg said. Business teams will face layoffs in May, he added. The company will also stop hiring for about 5,000 open positions.
Mr. Zuckerberg said his company must cope with a longer term change in the economy, marked by the end of low interest rates, growing geopolitical tensions and costly new regulations.
“At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” Mr. Zuckerberg wrote. “Given this outlook, we’ll need to operate more efficiently than our previous headcount reduction to ensure success.”
Meta said in a securities filing Tuesday that it expects to lower its annual expenses by roughly $3 billion from an estimated range it gave on Feb. 1. It now expects to spend a total of $86 billion to $92 billion this year, including the costs of its layoffs and restructuring, which it said could total $3 billion to $5 billion.
Meta’s share price rose more than 7% in Tuesday trading to just above $194, far outpacing the broader market. The stock is up more than 60% so far this year, though well below its all-time high of more than $380 in September 2021.
Tuesday’s announcements come after Meta’s layoff of about 11,000 employees—or roughly 13% of its workforce—last fall, in the first broad head-count reductions in the company’s history. The new round of cuts is likely to add up to roughly the same magnitude as those layoffs, The Wall Street Journal reported last week.
The new rounds of layoffs are likely to hit non-engineering roles especially hard, and among projects that will be cut are some wearable devices that were in the works at Reality Labs, Meta’s hardware and metaverse division, the Journal reported.
While saying that layoffs were difficult, Mr. Zuckerberg in his email on Tuesday also described what he said were the advantages of a leaner organization, expanding on a new view of management for the current economy that he has been laying out in recent months.
He said that many managers will “become individual contributors.” He also said that managers might now have up to 10 direct reports, rather than just a handful because the company now doesn’t expect to increase its head count as quickly as in the past.
“It’s well-understood that every layer of a hierarchy adds latency and risk aversion in information flow and decision-making,” Mr. Zuckerberg said. “Every manager typically reviews work and polishes off some rough edges before sending it further up the chain.” He said the company will be “focused on canceling projects that are duplicative or lower priority” because those can take broader resources and managers’ attention from core priorities.
“In retrospect, I underestimated the indirect costs of lower priority projects,” Mr. Zuckerberg wrote.
Mr. Zuckerberg said the company analyzed performance data and found that engineers who joined the company in person before working remotely or remained in person performed better on average than those who joined the company remotely. The analysis also showed that engineers perform better on average when they work in person with teammates at least three days a week, he said. The company’s hypothesis is that in-person work helps build trust and is more effective, he said.
He encouraged employees to find more time to work with colleagues in person. “We’re focusing on understanding this further and finding ways to make sure people build the necessary connections to work effectively,” he said Tuesday.
Meta reported a head count of 86,482 employees at the end of December, up 20% from a year earlier, but said that figure still included most of the 11,000 employees affected by the November layoffs.
Meta’s new layoffs add to waves of job cuts that have roiled Silicon Valley, where tech giants are now retrenching after adding employees by the tens of thousands through the pandemic. Technology companies including Amazon.com Inc. and Google parent Alphabet Inc. have cut thousands of jobs in recent months.
Since 2022, layoff tallies at tech companies have reached nearly 300,000 workers, according to Layoffs.fyi, a site that is tracking job cuts in the industry. Broadly, employment in the information industry was unchanged between July and January, according to federal data. Total employment rose in that time.
Meta said Tuesday that it plans to extend a hiring freeze and pause internal transfers in the company while the layoffs and restructuring occur. Those freezes will lift in each unit once the restructuring there is complete.
U.S. employees affected by the layoffs will get 16 weeks of severance pay, plus an additional two weeks for every year they worked at Meta, the company said. Outside the U.S., packages will vary depending on local laws.