Facebook parent company Meta plans to lay off 10,000 workers starting Wednesday, part of a months-long downsizing and restructuring effort to remake the social media giant in an increasingly crowded social media market.
“This will be tough and there’s no way around that. It will mean saying goodbye to talented and passionate colleagues who have been part of our success,” Zuckerberg said. “We will support people in the same ways we have before and treat everyone with the gratitude they deserve.”
Zuckerberg has hinted at additional layoffs since at least January, emphasizing the company’s need to improve efficiency and trim middle management, during internal and external forums. The latest layoffs build upon November workforce cuts that slashed 11,000 jobs, or about 13 percent of Meta’s workforce, in the first widespread layoffs in the company’s history.
Like many internet platforms that make money from digital advertising, Meta is encountering economic challenges. The company is facing intensifying competition for advertising dollars and users from newer entrants in the social media market such as the short-form video network TikTok. Some digital advertisers have reduced their spending on social media ads because inflation has created too much market instability. Meanwhile, the Menlo Park, Calif.-based company over-hired during the coronavirus pandemic, as many social media platforms experienced a boom during government-driven shutdowns.
Zuckerberg has pledged that 2023 will be the “year of efficiency” as the company seeks to trim middle management and speed up its decision-making.
“A leaner org will execute its highest priorities faster. People will be more productive, and their work will be more fun and fulfilling," Zuckerberg said in the Tuesday post. "We will become an even greater magnet for the most talented people.”
Meta’s downsizing also comes at a chaotic time for the tech industry, following the stunning collapse of Silicon Valley Bank, which catered to tech start-ups. It was the second-largest bank failure in U.S. history. The implosion set off a three-day saga in which start-up founders warned that they might be unable to make payroll or be forced into layoffs if their funds were frozen.
Though the crisis was averted by the U.S. government’s announcement late Sunday that it would guarantee the at-risk deposits, the tech sector is still slashing tens of thousands of jobs. About 1,532 tech companies have laid off 289,613 workers in 2022 and 2023, according to Layoffs.fyi, an online layoff tracker for the tech sector. In addition to Meta, Google and Amazon have cut their workforces.
In addition to the cuts, Zuckerberg said that leaders of various divisions will be announcing restructuring plans intended to deflate the company’s hierarchy, cancel lower-priority projects and reduce the pace of hiring. Inside the company, some expect reassigned workers to quit, creating attrition by default, The Post reported in February.
Meta plans to ask many managers to become individual contributors, or employees who don’t have direct reports. Zuckerberg also said it plans to rebalance its product teams for a more “optimal ratio of engineers to other roles” to ensure “our company remains primarily technologists.”
“It’s important for all groups to get leaner and more efficient to enable our technology groups to get as lean and efficient as possible,” Zuckerberg said. “We will make sure we continue to meet all our critical and legal obligations as we find ways to operate more efficiently.”
Despite its economic challenges, Meta — which changed its name from Facebook more than a year ago — is still investing in its big bet to build out immersive digital realms known as the metaverse. Zuckerberg argues people will want to work, shop and socialize through augmented and virtual-reality-powered devices, which he thinks will become the next great computing platform after mobile phones.
But Meta has struggled to grow the audience for virtual reality, in part because the company is still developing the underlying technology and a wider range of applications that would expand its appeal. Meta has said it expects operating losses for Reality Labs, the division working on VR hardware offerings such as the Quest headsets, to grow in 2023.
But even Meta Chief Technology Officer Andrew Bosworth told employees Tuesday on an internal message board that Reality Labs would have to scrutinize its product roadmap to determine “what changes we need to make to be in line with the company’s budget considerations,” according to a copy of the message viewed by The Washington Post.
“The reality is that we need to operate differently as a company and that means making some tough choices without the amount of resources we may have been used to,” he wrote.