Meta Platforms Inc., the owner of Facebook and Instagram, is planning to cut thousands of jobs as soon as this week in a fresh round of layoffs, Bloomberg reported citing people familiar with the matter.
The report said the company is planning to offer buyout packages to managers and cutting whole teams it considered nonessential. Directors and vice presidents were asked to make lists of employees that can be let go.
Meta in its first-ever major layoff in November last year had cut around 11,000 employees or around 13 percent of its workforce. Also, the company extended its hiring freeze through the first quarter with a small number of exceptions.
With its latest move, the social networking major is said to focus on its financial goals and become a more efficient organization amid a slowdown in advertising revenue, which accounts for the vast majority of the social network's revenue.
Aiming to cut costs and realign its business, the company recently announced several measures, including the layoff of around 11,000 employees, and a facilities consolidation strategy to sublease, early terminate or abandon several office buildings under operating leases. The company also canceled multiple data center projects.
As part of its efforts to find more revenue sources, Chief Executive Officer Mark Zuckerberg in late February announced plans to unveil a new subscription service, Meta Verified, in Australia and New Zealand this week and in more countries soon.
At the time of its previous major layoff, Zuckerberg noted that the company made the decision to significantly increase its investments as the world rapidly moved online at the start of the COVID-19 pandemic, and the surge of e-commerce led to outsized revenue growth. Unfortunately, this did not play out the way it was expected amid the macroeconomic downturn, increased competition, and ads signal loss, and its revenues were hurt.
Meta is now struggling to keep up its profit and revenues, which declined 55 percent and 4 percent, respectively, in the fourth quarter from last year.
Zuckerberg reportedly was expecting additional cuts as he expects 2023 to be a year of efficiency for the company.
The Financial Times recently reported that there is not much clarity for Meta employees as some are being paid for zero work, and team leaders and project managers are unable to plan their workloads.
Many major US tech firms, that over-hired during the COVID-19 pandemic, have been undertaking thousands of job cuts or hiring freezes amid the slowing growth, including Alphabet Inc., the parent company of search giant Google, Microsoft, Amazon, and Twitter.
Alphabet recently announced about 12,000 job cuts, while Microsoft announced cuts of 10,000 employees, and Amazon 18,000 employees or about 6 percent of its workforce.
Twitter in late February laid off at least 50 employees in another round of job cuts over the weekend. In early November, Twitter laid off thousands of employees in a cost-cutting measure by Elon Musk, who acquired the social media company for $44 billion.
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