Meta’s ‘year of efficiency’ could result in thousands of layoffs

Article by Gadjo Sevilla | Mar 8, 2023

The news: Meta is planning its second round of job cuts in four months, which could result in thousands more laid off this week, per Bloomberg.

Tech layoffs continue to pile on: Meta, which axed 11,000 workers in 2022, was one of the first Big Tech companies to resort to layoffs as a release valve for the economic downturn that was exacerbated by evaporating ad budgets.

CEO Mark Zuckerberg is embracing his role as Meta’s chopper-in-chief and has designated 2023 as the company’s “year of efficiency,” foreshadowing continued cutbacks.
Meta is also trimming middle management roles and has been asking directors and VPs to make lists of employees that can be let go.

What’s next: While still unconfirmed by the company, news of a new wave of layoffs resulted in Meta’s stock rising Tuesday.

Meta could justify the next round of layoffs by pointing at its operating costs, which have jumped 22% YoY to $25.8 billion even as sales dropped 4% to $32 billion during Q4 2023.
Meta’s stock plunged 71% in 2022 after the company spent $15 billion on building Zuckerberg’s vision for a VR metaverse.

Our take: Multiple waves of layoffs are expected to hit Meta this year. Facebook, Instagram, WhatsApp, Facebook, and Reality Labs are just some of the businesses under Meta that may be affected, and rebalancing staff in each business unit will take time.

The latest Meta layoffs, which will likely be finalized before Zuckerberg takes his paternity leave, could set off another flurry of layoffs in other companies.
Tech companies have already laid off more than 125,000 employees so far this year, per Layoffs.fyi. In all of 2022, over 160,000 tech workers were laid off.

Atlassian, SiriusXM, MasterClass, and Airbnb are just a few of the latest companies to undergo layoffs.