Meta's latest round of job cuts hits 6,000 employees
The cuts are part of a comprehensive strategy aimed at cost reduction and operational streamlining
On Wednesday, Meta initiated its most recent round of job cuts, estimated to affect approximately 6,000 employees.
These reductions are part of Meta's designated "Year of Efficiency," wherein the company undergoes significant restructuring to achieve cost savings and streamline its organisational structure.
The first wave of job cuts at Meta in November 2022 had an impact on 11,000 employees, while the second round in April 2023 affected around 4,000 workers. When considering the combined cuts in April and May, it is estimated that approximately 10,000 individuals will be losing their jobs.
The redundancies made this week predominantly focused on business roles, whereas the April round of cuts impacted tech teams.
On Wednesday, several employees from various teams, including marketing, recruiting, engineering, and corporate communications, took to LinkedIn to publicly announce that they had been made redundant. In addition, Meta has halted recruitment for approximately 5,000 vacant positions.
Mark Zuckerberg has underscored the importance of these measures, attributing them to Meta's long-term vision and a commitment to enhancing business performance.
"As I've talked about efficiency this year, I've said that part of our work will involve removing jobs — and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision," Zuckerberg said in blog post in March.
"Since we reduced our workforce last year, one surprising result is that many things have gone faster."
In retrospect, I underestimated the indirect costs of lower priority projects."
Meta's decision to make such large scale redundancies came after a prolonged period of declining revenue growth, influenced by both high inflation and a decline in digital advertising demand.
With thousands of employees having lost their jobs, morale is understandably low at Meta. Employees have been anxiously awaiting news for months, uncertain about the fate of their roles.
In its financial report for Q1 2023 released last month, Meta disclosed a rise in overall sales revenue. However, Meta Reality Labs, the division responsible for the development of advanced virtual and augmented reality technologies for the metaverse, incurred a substantial operating loss of $3.99 billion.
Despite scaling back its ambitions for the metaverse, Meta remains committed to the concept. During Meta's earnings call, Zuckerberg said that the company has no intention of shifting its focus away from this field. Meta said its total expenses for 2023 are expected to be within the range of $86 billion to $90 billion, which includes restructuring costs of $3 billion to $5 billion.
The average number of Facebook daily active users (DAUs) in March 2023 was 2.04 billion, representing a 4% year-over-year growth.
The company's projections for the second quarter have also surpassed expectations. Meta anticipates revenue of between $29.5 billion and $32 billion for Q2 2023, compared to analysts' estimates of $29.5 billion, according to Refinitiv. Investors have shown support for Zuckerberg's strategy to streamline his company via a series of cost-cutting measures.
Last month, Meta introduced its proprietary generative AI coding tool and unveiled a tool called AI Sandbox, catering to advertisers.
Looking ahead, Meta is actively engaged in developing its custom chips and a supercomputer infrastructure to facilitate extensive AI research. This strategic initiative positions Meta to compete with other major players in the industry, such as Microsoft and Google, who also possess their own supercomputers.