Meta will lay off an additional 10,000 employees through multiple rounds of cuts over the coming two months, close hiring for 5,000 open roles, and cancel more low-priority projects, CEO Mark Zuckerberg announced on Tuesday. These cuts come just four months after he laid off 11,000 employees, or 13 percent of the company, last November.
The first wave of layoffs will start this week and impact Meta’s recruiting organization, followed by a second wave for tech roles in April and a third focused on business roles in late May. “My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead,” Zuckerberg wrote in a memo to employees that was also posted on his Facebook page.
He called the collapse in Meta’s revenue growth last year a “humbling wake-up call” and told employees that “we should prepare ourselves for the possibility that this new economic reality will continue for many years.”
“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 wrote. “Given this outlook, we’ll need to operate more efficiently than our previous headcount reduction to ensure success.”
In a separate filing with the SEC, Meta said the new cuts will lower the high end of its expense guidance for the year by $3 billion. The company’s headcount ballooned during the pandemic from 48,000 on March 31, 2020 to 87,000 before layoffs started in November.
“We should prepare ourselves for the possibility that this new economic reality will continue for many years.”
During Meta’s last earnings call in February, Zuckerberg declared this the “year of efficiency,” even as he continues to spend billions to build out his vision of the metaverse. Since November’s layoffs, he has been focused on reducing layers of management, telling employees in January, “I don’t think you want a management structure that’s just managers managing managers, managing managers, managing managers, managing the people who are doing the work.”
In his memo announcing more layoffs, Zuckerberg said that it no longer makes sense for managers to have only “a few” direct reports and confirmed that many of them will be asked to become individual contributors throughout the company. “A leaner org will execute its highest priorities faster,” he wrote. “People will be more productive, and their work will be more fun and fulfilling.”
He said Meta will continue canceling low-priority projects throughout the company and that he had “underestimated the indirect costs” of running them. Just yesterday, Meta said it would end work to facilitate the sharing of NFTs on Facebook and Instagram, and a standalone product group for creating new social apps called New Product Experimentation was quietly canned last week.
While Zuckerberg was the first Big Tech CEO to aggressively lean into remote work early in the pandemic, on Tuesday, he hinted that junior engineers may be required to come into the office three days a week. “This requires further study, but our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively,” he wrote.
Despite sinking revenue and massive job cuts, Zuckerberg isn’t giving up on his metaverse plans. In addition to launching a new Quest 3 headset later this year, Meta is looking to keep up with its Big Tech counterparts by establishing teams dedicated to building tools powered by artificial intelligence and AI “personas.” It’s also planning a bevy of AR and VR hardware devices over the next several years, including its first pair of AR glasses in 2027.
Other tech companies like Amazon, Google, and Microsoft announced layoffs affecting tens of thousands of workers in total earlier this year, with smaller companies like Spotify, Vimeo, and DoorDash also carrying out recent job cuts. Meta’s layoffs come on the heels of the collapse of Silicon Valley Bank, one of the most prominent banks in the tech industry.