Meta bracing for another round of layoffs, organizational restructuring
What's the story
Meta is reportedly planning to further reduce its headcount in the coming weeks.
Financial Times reported Facebook's parent company would restructure the firm post-completion of staff performance reviews sometime next month.
To note, CEO Mark Zuckerberg is unhappy with the tech giant's organizational structure and has even revealed his plans to turn Meta into "a slightly smaller organization" by the end of the year.
Context
Why does this story matter?
The post-pandemic economic meltdown has been catastrophic for the tech industry. From Meta to Google and Microsoft, no company has been spared.
Aggressive hiring done during the pandemic has seemingly come to bite the companies, and employees are now facing the brunt.
Meta's layoffs last year were the biggest in its history, and the upcoming axing might eclipse those figures.
Grim
Thousands of employees to lose jobs
In November last year, Meta axed 13% of its workforce, i.e., around 11,000 employees. However, the worst is yet to come, it seems.
The firm is now likely to fire roughly 87,000 workers. Reportedly, work at the company has slowed to a crawl, and employees have been told to cancel non-essential travel until September.
The company will now invest in fewer "high-priority growth areas."
Reason
Why are layoffs being considered?
Mark Zuckerberg is unhappy with the number of managers in various Meta teams. Thus, the company wants to go for organizational restructuring.
The company believes that over the coming year, "some teams will grow meaningfully, but most other teams will stay flat or shrink."
Falling advertisement revenue, competition from rivals, and macroeconomic headwinds that have affected tech companies are also influencing Meta's layoff decision.
Indication
Layoffs were in works for long time
Zuckerberg has been hinting at job cuts since June 2022.
At a company meeting, he told employees that "here [at Meta] are probably a bunch of people at the company who shouldn't be here."
The Meta CEO claimed the firm was seeing the "worst downturns" in its history, adding, "I think some of you might decide that this place isn't for you." Ominous indeed.
Finance
Meta's financial results are surprisingly positive
The fourth-quarter earnings report presented by Meta earlier this month painted a surprisingly rosy picture of the firm.
The company showed better-than-expected performance in the last three months of 2022, with $32.17 billion in revenue (ahead of the projected $31.5 billion).
Its expenses rose 22% year-over-year (YoY) to $25.8 billion, while the daily active users (DAU) increased by 5% across various Meta platforms.