Meta to launch a fresh round of cuts to its workforce this week

Mark Zuckerberg will begin a second round of cuts to Meta’s workforce on Wednesday, according to people familiar with the matter, as he continues his push to cut costs in what he has deemed a “year of efficiency”. 

The $469bn social media company is preparing to slash thousands of jobs, several people said, as part of the chief executive’s push to wrestle its finances under control as the economic slowdown has eaten into its earnings. This comes on top of the reductions announced late last year, which affected 11,000 jobs of a workforce that was 87,000-strong at the time.

A growing number of senior leaders have also quit the company in recent weeks, adding to uncertainty internally. Nada Stirratt, vice-president of the sales organisation for the Americas at Meta, resigned on Monday, according to three people familiar with the matter, and chief business officer Marne Levine left in February.

The deep cuts to Meta’s workforce have come in response to investor frustration over the company’s bloated headcount and Zuckerberg’s decision to make multibillion-dollar investments in building a “metaverse”. 

In anticipation of the cuts, some team budgets have been frozen, while leaders recently told some staff that they were not handing out promotions to director level for certain teams, two people said. The uncertainty has resulted in disruption and low morale internally for months, multiple insiders said.

“We have a real dilemma on our hands in terms of talent when there’s so much chaos,” one senior staffer said, adding that it was also affecting advancement and compensation.

As with other businesses largely dependent on advertising spending, Meta has slumped this year faced with tough macroeconomic conditions and competition with rivals such as TikTok. At the same time, Zuckerberg has pivoted his company’s focus to investing $10bn a year into building a digital avatar-filled metaverse, an initiative that is unlikely to be profitable for years.

In February, Zuckerberg announced that Meta — which owns Facebook, Instagram and WhatsApp — would adopt a mantra of “efficiency”, including slashing ineffective projects and trimming some layers in middle management “to make decisions faster”. To achieve the latter, some managers are being asked to either move to roles where they do not manage anyone, known as individual contributor roles, or leave the company.

The latest cuts are expected to disproportionately hit the policy, marketing and communications teams, according to people familiar with the matter.

The cuts are likely to roll out in multiple rounds across several months, according to a report by the Wall Street Journal.

Meta declined to comment.

On Monday, Meta’s head of fintech Stephane Kasriel said on Twitter that the company was winding down its digital collectibles, or non-fungible tokens, in order to “focus on other ways to support creators, people, and businesses”. 

The cuts will be welcomed by Wall Street. Already, Meta’s improving outlook at its fourth-quarter results sent shares up 18 per cent, adding $88bn to its market value. In a Jefferies equity research note this month, analysts wrote: “We believe more headcount reductions are needed to offset the last 2 years of excess hiring.” 

But employees have complained of delays to projects and staffers lacking motivation given the spectre of the second round of cuts so soon after the round in November.

#Meta #launch #fresh #cuts #workforce #week

Leave a Comment