Meta has announced plans to cut 10,000 more jobs over the coming months as chief executive Mark Zuckerberg continues to cut costs in what he calls 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 percent of the workforce – the most dramatic in its history.
In a blog post, Zuckerberg said the leadership would come up with a restructuring plan to round out the organization over the next few months, with the group shedding lower priority projects and reducing hiring rates. Meta will also close 5,000 open positions.
The latest round of cuts underscores Zuckerberg’s push to fight Meta’s struggling finances as the economic downturn has squeezed revenue.
“Last year was a sobering wake-up call. The world economy changed, competitive pressure increased and growth slowed,” Zuckerberg said. “At this point, I think we have to prepare ourselves for the possibility that this new economic reality will continue for years.”
The recruiting team was outlined by Zuckerberg as one of the divisions most affected by this round of cuts. Policy, marketing and communications teams are also expected to be hit, according to people familiar with the matter.
Many senior leaders have also left the company in recent weeks, adding to the uncertainty within. Nada Stirratt, vice president of sales organization 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.
Deep cuts to Meta’s workforce have been in response to investor frustration over the company’s headcount and Zuckerberg’s decision to invest billions of dollars in building the “metaverse”.
In anticipation of the cuts, some team budgets have been frozen, while leaders recently told some staffers that they are not offering promotions to the director level for certain teams, the two people said. The uncertainty has led to disruptions and low morale for months, many insiders said.
“We have a real dilemma in our hands in terms of talent when there is so much chaos,” one senior staff said, adding that this affects progress and loss.
Like other businesses that are largely dependent on advertising spending, Meta has been on the decline this year, facing tough macroeconomic conditions and competition from rivals such as TikTok. At the same time, Zuckerberg has pivoted the company’s focus to invest $10bn a year in building a metaverse filled with digital avatars, an initiative that has not been profitable for years.
In February, Zuckerberg announced that Meta – which owns Facebook, Instagram and WhatsApp – will adopt a mantra of “efficiency”, including cutting ineffective jobs and cutting several layers in middle management “to make decisions faster”. To achieve the latter, some managers are asked to move into roles that do not manage anyone, known as individual contributor roles, or to leave the company.
On Monday, Meta’s head of fintech Stephane Kasriel said on Twitter that the company is releasing digital collections, or non-fungible tokens, so it can “focus on other ways to support creators, people and businesses”.
The cuts will be welcomed by Wall Street. Already, Meta’s improved outlook on its fourth-quarter results sent the stock up 18 percent, 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 past 2 years of overstaffing.”
But employees complained about project delays and unmotivated staff due to a second round of job cuts after November.