Last November, Facebook’s parent company, Meta, made its biggest downsizing yet, laying off more than 11,000 employees. But it appears that other staff will be given pink slips.
The Financial Times reported on Saturday that Meta Platforms has delayed finalizing the budget of many of its teams as the company contemplates a new round of layoffs.
Meta Feeling the Pinch of Rising Expenses
The impending layoffs are part of CEO Mark Zuckerberg’s strategy to cut costs. According to three current and former Meta employees who requested anonymity, the layoffs are anticipated to occur in March, as the company is currently conducting employee performance reviews.
Earlier this month, the company said it expects to spend 2023 between $89 billion and $95 billion, a “year of efficiency” that will cause “disruption” in the social media company, as Zuckerberg described it.
In recent weeks, there has been a lack of clarity about the budget and future headcount, the Financial Times revealed, citing two Meta employees familiar with the matter.
Image: MobileSyrup
Earlier in November, Zuckerberg told analysts that the business might be “a little smaller” by the end of 2023.
Labor cuts in November mainly affected Instagram, Whatsapp, and Facebook, while Metaverse positions were mainly cut. The company also announced a layoff for the first three months of 2023 at the time.
A source said “layoffs and other layoffs” accounted for $975 million in Meta’s balance sheet, or an average of $88,000 per laid-off employee. For companies, layoffs have become a costly endeavor.
Mark Zuckerberg. Image: Drew Angerer/Getty Images
“Honestly, it’s still a mess,” the FT quoted one Meta employee as saying. “The year of ‘efficiency’ begins with more people being paid to do nothing.”
‘Flattening’ Organizational Structure
During a recent earnings call, Zuckerberg addressed the difficult decision to cut the workforce:
“I said clearly that this is the beginning of our focus on efficiency and not the end,” Zuckerberg said, citing middle management as the next target.
Zuckerberg also stated in a Facebook post that he is working on “flattening” the organizational structure and eliminating some middle management components in order to make decisions more quickly.
Internally referred to as “flattening,” some employees fear that individuals who switch roles will actually be demoted, according to sources.
“As part of this, we will be more proactive about cutting projects that are not performing or can no longer be important,” Zuckerberg said. The plan includes using Artificial Intelligence tools to help Meta’s engineers be more productive, he added.
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Metaverse, a largely unfinished virtual environment that has disappointed users and could take years to turn a profit — if at all — is one of Meta’s current goals.
In 2022, the metaverse part of the business, Reality Labs, lost $13.7 billion, up from a loss of $10.2 billion from the previous year.
-Images shown are from Listverse