Facebook parent Meta plans 10,000 job cuts in new round of lay-offs

CEO Mark Zuckerberg, in an email to employees, talks about the advantages of a leaner organisation after announcing another big round of job cuts.

Meta boss Mark Zuckerberg has told staff that the tech giant would conduct multiple rounds of job cuts, as well as cancel some projects and reduce hiring rates. Picture: David Paul Morris/Getty Images

Meta Platforms said it would cut roughly 10,000 jobs over the coming months, the Facebook parent’s second wave of mass lay-offs 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 lay-offs in its technology groups in late April, Mr Zuckerberg said. Business teams will face lay-offs 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 $US3bn ($4.49bn) from an estimated range it gave on February 1. It now expects to spend a total of $US86bn to $US92bn this year, including the costs of its lay-offs and restructuring, which it said could total $US3bn to $US5bn.

Tuesday’s announcements come after Meta’s lay-off of about 11,000 employees — or roughly 13 per cent of its workforce — last fall, in the first broad headcount reductions in the company’s history. The new round of cuts is likely to add up to roughly the same magnitude as those lay-offs, The Wall Street Journal reported last week.

The new rounds of lay-offs 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 lay-offs were difficult, Mr Zuckerberg in his email on Tuesday also described what he said were the advantages of a leaner organisation, 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 headcount 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 cancelling 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 analysed 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 headcount of 86,482 employees at the end of December, up 20 per cent from a year earlier, but said that figure still included most of the 11,000 employees affected by the November lay-offs.

Meta’s new lay-offs 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, lay-off 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 lay-offs and restructuring occur. Those freezes will lift in each unit once the restructuring there is complete.

US employees affected by the lay-offs will get 16 weeks of severance pay, plus an additional two weeks for every year they worked at Meta, the company said. Outside the US, packages will vary depending on local laws.

The Wall Street Journal