Meta, the parent company of Facebook, announced on Tuesday that it would lay off an additional 10,000 employees.
As The Dallas Express reported, Meta laid off 11,000 employees in November, and then roughly 7,000 employees were given “subpar” reviews in February, which many understood as a precursor to further layoffs.
In a news release on March 14, CEO Mark Zuckerberg explained that in line with it being the “Year of Efficiency” for Meta, a restructuring is taking place that will see around 10,000 people laid off and 5,000 job openings canceled.
Zuckerberg warned that economic instability could continue for “many years,” and the company should prepare for the potential of a “new economic reality.”
“Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation,” he explained in the news release.
This restructuring will cost between $3 billion and $5 billion. Those laid off are expected to get 16 weeks of base pay as severance, plus two weeks for every year worked at the company, according to The Business Journals.
With Meta aiming to be “a stronger and more nimble organization,” as Zuckerberg said in the company’s Q4 report, these cuts will lower its total expenses in 2023, ranging from $86 billion to $92 billion, as stated in a recent filing with the Security and Exchange Commission. Last year’s total expenses ranged from $89 to $95 billion.
As part of the remodeling, Meta will flatten out its organizational structure by removing the middle layers of management.
“It’s well-understood that every layer of a hierarchy adds latency and risk aversion in information flow and decision-making,” Zuckerberg explained in the press release.
The number of direct reports each manager has will be increased and they will be expected to act as individual contributors reporting to almost all levels.
Zuckerberg also stressed that employees should work at least three days a week in-office, hinting at a possible reversal of Meta’s commitment to “remote-first” work made amid COVID-19 pandemic lockdowns. Citing recent research, he noted that employees who started in-office and either stayed or transitioned to remote work performed better than those who started out and remained remote.
The projects at Meta are also falling within the purview of this new emphasis on efficiency.
Lower priority projects will be eliminated, adding to Zuckerberg’s announcement in February that those deemed underperforming would be axed, per CNBC.
As the company is making moves to be leaner, Meta seems to be pulling back its investments in the development of virtual reality and the augmented reality technologies necessary for constructing the metaverse. The digital universe yielded only $2.16 billion in revenue in 2022, generating a loss of approximately $13.7 billion, per CNBC.
Zuckerberg’s recent news release instead pointed to focusing on generative AI, such as chatbots or those capable of producing images, videos, and text, as Meta’s competitors — like Microsoft with its ChatGPT — have been doing.
After the news of more layoffs and initiatives to make the company leaner, Meta’s shares jumped 7% when markets closed on Tuesday.
Meta is not the only company to announce a significant cut to its workforce.
Earlier this year Microsoft revealed plans to lay off 10,000 workers, while Amazon announced it would likewise let 18,000 employees go, as The Dallas Express reported.
Tech companies have logged over 300,000 job cuts since the start of 2022 per the tracking site Layoffs.fyi, leading the way in workforce reduction.