Meta to fire more employees to achieve financial targets
What's the story
Facebook-parent Meta is not done firing employees. The company plans to cut more jobs as soon as this week, Bloomberg reported. The social media giant terminated over 11,000 employees, or 13% of its workforce, in November in a bid to cut costs and become more efficient. Rumors of a second round of layoffs at Meta have been gaining momentum for a while.
Context
Why does this story matter?
Meta's 2022 was characterized by economic uncertainties, falling ad revenue, and rivalry with TikTok. The company's revenue fell for the first time since it went public in 2012. The company resorted to layoffs to steady the ship. The decision worked, and Meta became the poster child for austerity. The new round of layoffs will improve Meta's credentials but at the cost of employee morale.
Layoffs
More job cuts before Zuckerberg goes on paternity leave
Meta aims to achieve its financial targets with the new round of job cuts. The company has reportedly been asking directors and vice presidents to make a list of employees that can be let go. People working on this expect to complete it before CEO Mark Zuckerberg goes on paternity leave for his third child. A final number could be out by next week.
Reason
Meta's stock has risen by over 80% since November
The first round of layoffs in November proved something valuable to Meta - market rewards job cuts. The company was struggling in the market in 2022. From the time it announced layoffs (November 9, 2022) to March 6, the company's stock has risen by over 80%. It aims to make more gains in the market with more job cuts.
Reorganization
New round of layoffs different from organizational flattening
The fresh round of layoffs at Meta will differ from the management flattening we have been hearing for a while. Zuckerberg has been unhappy with the company's organizational structure, where a team has multiple layers of management. The company has already informed managers that their teams will be taken away. As a result, they will be pushed to lower-level roles.
Fear
Meta employees are anxious and scared
Meta employees have been at the edge of their seats since November 2022. Constant rumors about layoffs and a performance review where around 7,000 employees received subpar ratings have increased the level of anxiety at Menlo Park, California. Heightened anxiety and low morale have become a common theme at Meta. Many fear whether they will receive their bonuses if they get fired beforehand.