Meta begins laying off thousands of workers
Meta, the parent company of Facebook, initiated its latest round of major layoffs, specifically targeting its business groups. This move is part of the company's larger multibillion-dollar cost-saving plan, marking its third series of layoffs in recent months.
The recent round of job cuts is anticipated to impact around 10,000 employees. The latest layoffs follow the company's November job cuts affecting 11,000 workers and the April reductions primarily targeting technical roles, as reported by CNBC.
The move has impacted employees from various departments, including, marketing, recruiting, and engineering. Many of them took to LinkedIn on Wednesday to share their predicament.
The company did not confirm the ongoing reductions. However, a spokesperson for Meta referred CNN to a March blog post by CEO Mark Zuckerberg. Zuckerberg announced in the post that Meta would reduce its workforce by 10,000 employees this year.
Mark Zuckerberg's Statement on the Layoffs
"As I've talked about efficiency this year, I've said that part of our work will involve removing jobs — and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long-term vision. I understand that this update may still feel surprising, so I'd like to lay out some broader context on our vision, our culture, and our operating philosophy."
Zuckerberg asserted that these substantial reductions were necessary for the company to become more agile and effective amid a challenging economic landscape and a weakened digital advertising market.
Employee Impact and Stock Market Reaction
Interestingly, the workforce reduction comes after a hiring surge that doubled Meta's workforce size since 2020. Nonetheless, despite downsizing, Meta's shares have demonstrated resilience.
The stock price has more than doubled this year, which market analysts largely attribute to the firm's aggressive cost-cutting measures and a shift in focus toward artificial intelligence (AI).
Non-engineering roles within the company have faced the most significant impact, signaling Meta's intent to enhance its engineering capabilities. Even in technology teams, non-engineering roles like content design and user experience research have experienced considerable cutbacks.
The company executed significant layoffs in April, with nearly 490 employees from the international headquarters in Dublin losing their jobs, accounting for almost 20% of the Irish workforce.
Executives Hit by Layoffs
The layoffs have not spared high-level executives. Two top executives in the crucial Indian market director of marketing, Avinash Pant and Saket Jha Saurabh, director, and head of media partnerships, were also relieved of their duties, according to insiders familiar with the situation, as reported by Reuters.
Investment in Emerging Technologies and Financial Performance
Despite a cost-cutting approach, Meta continues to demonstrate a solid commitment to investing in emerging technologies.
A prime example is the metaverse and the company's Reality Labs unit, which is dedicated to developing virtual reality (VR) and augmented reality (AR) technologies. This unit reported a substantial loss in 2022, reflecting the financial challenges involved in spearheading new technological frontiers.
In its Q1 financial results, Meta reported a 3% increase in revenue compared to the same period last year, indicating a glimmer of positive growth following three consecutive quarters of declining revenue.
The company's Reality Labs unit reported a $3.99 billion operating loss during Q1 while still making $339 million in sales.
Investor Response to Meta's Strategic Realignments
Meta's aggressive cost-cutting measures and strategic realignments have been met with a positive response from the investor community.
The company's stock has seen a significant upturn, with a 180% rise since November. This trend suggests investor confidence in the tech giant's direction towards leaner operations and enhanced operational efficiency.