Meta Platforms Inc. plans to lay off 10,000 more employees as it focuses on a “year of efficiency.” The Facebook parent company announced its latest round of layoffs in a Tuesday morning note to employees that was also posted on the company’s corporate blog. In November, Meta announced plans to slash more than 11,000 in an initial round of cuts. Meta shares were up more than 6% in late-morning trading Tuesday. “With less hiring, I’ve made the difficult decision to further reduce the size of our recruiting team,” Chief Executive Mark Zuckerberg said in Tuesday’s announcement. The company plans to inform recruitment team members about their status tomorrow and will announce the impact on tech and business teams in April and May, respectively.
A current Meta employee said he was bracing for the worst in the spring, when his division goes through cuts, adding to the uncertainty and fear gripping parts of the company. Zuckerberg noted that Meta would also close about 5,000 additional roles that the company has yet to hire for. “After restructuring, we plan to lift hiring and transfer freezes in each group,” he said. Meta’s deeper cuts were initially praised on Wall Street, which is looking for bloated tech companies to rein in costs. “The Year of Efficiency is becoming more efficient,” Evercore ISI analyst Mark Mahaney wrote Tuesday in a note that raised Meta’s price target to $305 from $275. “With the new, lowered expense guidance, META is declaring that it can recover to growth with de minimis growth in expenses.”
Meta disclosed in its latest 10-K filing with the Securities and Exchange Commission that it had 86,482 employees as of the end of 2022, though it also said that the “reported head count includes a substantial majority” of the 11,000 employees who were affected by the first round of layoffs. Meta expected those employees to no longer be reflected in its head count by the end of the first quarter. Technology companies including Meta went on massive hiring sprees during the height of the pandemic as the stay-home economy roared. But advertising spending has slowed since then, and Wall Street wants companies to be more disciplined with their costs. Amazon.com Inc., Alphabet Inc.’s Google, Microsoft Corp., Salesforce Inc., and Zoom Video Communications Inc. are also shedding tens of thousands of jobs.
Meta initially planned to push forward with aggressive expense plans for this year, but the company’s spendthrift ways didn’t sit well with investors last fall, prompting Zuckerberg to pivot and announce the November wave of job cuts. Since then, he’s espoused discipline even further, dubbing 2023 Meta’s year of efficiency in the company’s latest earnings materials. The company has already lowered its 2023 expense forecast multiple times and did so again Tuesday. Meta disclosed in a filing with the SEC that it now expects to incur $86 billion to $92 billion in total expenses this year, whereas its prior forecast was for $89 billion to $95 billion. Prior to the first round of layoffs, Meta had been expecting $96 billion to $101 billion in total expenses for 2023. Still, Meta continues to pour billions of dollars into developing virtual reality and augmented reality technologies essential to creating its vaunted metaverse. Meta’s Reality Labs division tasked with creating the metaverse lost about $13.7 billion in 2022 on $2.16 billion of revenue.
Market Watch