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Meta has announced plans to axe a further 10,000 jobs over the coming months as chief executive Mark Zuckerberg continues to cut costs in what he has called a “year of efficiency”.
The move, announced on Tuesday, marks the $469bn social media company’s second major round of cuts in just four months. It comes on top of the reductions announced in November, which affected 11,000 jobs — about 13 per cent of its workforce — the most dramatic cull in its history.
In a blog post, Zuckerberg said leaders would lay out restructuring plans to flatten the organisation over the next couple of months, with the group cancelling lower-priority projects and reducing hiring rates. Meta will also close 5,000 open vacancies.
The fresh round of cuts underlines Zuckerberg’s push to wrestle Meta’s finances under control as the economic slowdown has eaten into its earnings.
“Last year was a humbling wake-up call. The world economy changed, competitive pressures grew and our growth slowed considerably,” said Zuckerberg. “At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.”
Recruiting teams were outlined by Zuckerberg as one division to be predominantly affected in this round of cuts. Policy, marketing and communications teams are also expected to be hit, according to people familiar with the matter.
A growing number of senior leaders have also quit the company in recent weeks, adding to uncertainty internally. Nada Stirratt, vice-president of the sales organisation for the Americas at Meta, resigned on Monday, according to three people familiar with the matter, and chief business officer Marne Levine left in February.
The deep cuts to Meta’s workforce have come in response to investor frustration over the company’s bloated headcount and Zuckerberg’s decision to make multibillion-dollar investments in building a “metaverse”.
In anticipation of the cuts, some team budgets have been frozen, while leaders recently told some staff that they were not handing out promotions to director level for certain teams, two people said. The uncertainty had resulted in disruption and low morale internally for months, multiple insiders said.
“We have a real dilemma on our hands in terms of talent when there’s so much chaos,” one senior staffer said, adding that it was affecting advancement and compensation.
As with other businesses largely dependent on advertising spending, Meta has slumped this year, faced with tough macroeconomic conditions and competition with rivals such as TikTok. At the same time, Zuckerberg has pivoted his company’s focus to investing $10bn a year into building a digital avatar-filled metaverse, an initiative that is unlikely to be profitable for years.
In February, Zuckerberg announced that Meta — which owns Facebook, Instagram and WhatsApp — would adopt a mantra of “efficiency”, including slashing ineffective projects and trimming some layers in middle management “to make decisions faster”. To achieve the latter, some managers are being asked to either move to roles where they do not manage anyone, known as individual contributor roles, or leave the company.
On Monday, Meta’s head of fintech Stephane Kasriel said on Twitter that the company was winding down its digital collectibles, or non-fungible tokens, in order to “focus on other ways to support creators, people and businesses”.
The cuts will be welcomed by Wall Street. Already, Meta’s improving outlook at its fourth-quarter results sent shares up 18 per cent, adding $88bn to its market value. In a Jefferies equity research note this month, analysts wrote: “We believe more headcount reductions are needed to offset the last 2 years of excess hiring.”
But employees have complained of delays to projects and staffers lacking motivation given the spectre of the second round of cuts so soon after those in November.
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