This week, Meta Platforms Inc. plans to start a significant round of layoffs, according to a new Wall Street Journal report. The move is expected to be the largest in a recent wave of tech employment losses following the sector's explosive development during the pandemic.
The upcoming layoffs would be the organization's first significant headcount cutbacks in its 18-year history. The number of Meta employees anticipated to lose their jobs may be the highest to date at a significant technology company in a year that has seen a retrenchment in the tech sector, even though it is smaller on a percentage basis than the cuts at Twitter Inc. this past week, which affected about half of that company's staff.
An announcement regarding the layoffs, which are anticipated to affect thousands of people, is coming as soon as this Wednesday. At the end of September, Meta stated that it employed more than 87,000 people. Officials from the company have already instructed staff to postpone unnecessary travel starting this week.
In the meeting on Tuesday, CEO Mark Zuckerberg appeared dejected and claimed responsibility for the company's mistakes, adding that his overconfidence in the company's future growth had resulted in overstaffing.
The recruiting and business teams were particularly listed as being among those facing layoffs in his description of wide-ranging cuts, and he added that an internal notification of the company's layoff intentions is likely around 6 am Eastern time on Wednesday.
During the pandemic, as life and business transitioned more online, Meta, like other tech giants, went on a hiring spree. More than 27,000 new personnel were hired in total in 2020 and 2021, and this year's first nine months saw an additional 15,344 hires-roughly one-fourth of those made in the most recent quarter.
Over 70% of Meta's stock has been lost this year. Investors have been alarmed by the company's spending and potential dangers to its main social media business in addition to the company's highlighting of worsening macroeconomic conditions. Due to TikTok's fierce competition and Apple Inc.'s requirement that users consent to Apple tracking of their devices, the company's growth in many areas has slowed. This has limited the ability of social media platforms to target advertisements.
In an open letter to Zuckerberg last month, investment company Altimeter Capital suggested that Meta should reduce staff and scale back its plans for the metaverse in light of the growing unhappiness among shareholders. Additionally, Meta's costs have increased significantly, which resulted in a 98% decrease in free cash flow in the most recent quarter.
The company's expenses include significant expenditures in the additional computing power and artificial intelligence required to advance Reels, Meta's Instagram platform for short-form videos similar to TikTok, and to target advertisements with lesser data.