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Meta has planned a staff layoff that will affect thousands of workers across several divisions of the company to keep costs minimal.
Meta Platforms (NASDAQ: META) plans to embark on a mass layoff of employees this week, according to the Wall Street Journal. The WSJ report states that the multinational tech conglomerate is on the verge of axing thousands of employees off its 87,000+ workforce. The layoff is to trim costs amid a challenging period for Meta and a slowing economy.
The Meta layoff could happen as early as Wednesday and could be one of the company’s most significant headcount reductions since its formation in 2004. Although the number of affected employees remains unclear, Meta’s downsizing could be one of the largest of its kind at a big tech firm. Also, the projected cutback could impact employees across a broad range of divisions at the tech giant.
Meta Layoff Follows Underwhelming Q3 Report
Meta’s planned staff reduction comes on the heels of an underwhelming Q3 report in which it missed revenue expectations and increased operating costs. The company has been struggling financially for months amid its stated goal of establishing a comprehensive and lucrative metaverse. Meta CEO Mark Zuckerberg previously stated that metaverse investments could take up to a decade to begin to bear fruit. In the meantime, the chief executive has undertaken several measures to tone down operational costs. These include suspending staff hires and projects and reorganizing already existing teams across various departments. In an earnings call late last month, Zuckerberg explained:
“In 2023, we’re going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”
In addition, the Meta CEO had also forewarned employees of these tougher times back in July. At the time, Zuckerberg explained that workers may eventually have to take on more commitments using fewer resources. He further stated that the company would also grade their performances more intensely than previously, which may compel some workers to quit. In a call at the time, Zuckerberg noted:
“I think some of you might decide that this place isn’t for you, and that self-selection is OK with me. Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
Meta’s stock is currently trading at $90.79, representing a 7.56% drawdown over the last five days. In addition, the company shares are reportedly down by a massive 73.19% year-on-year (YoY).
Meta is not the only company in its industry considering austere measures to better cope with prevailing micro and macroeconomic factors. Other tech mainstays such as Microsoft Corp, Twitter Inc, and Snap Inc have also cut jobs and reduced hirings.