Meta is laying off another 10,000 workers in the second wave of cuts at the company in four months.
Meta CEO Mark Zuckerberg said the cuts were necessary to improve the company's "financial performance in a difficult environment." The company formerly known as Facebook will now have about 65,000 employees, down from a peak last year of roughly 86,000. In November, 11,000 employees were laid off in a broad cull Zuckerberg referred to at the time as "a last resort."
"This will be tough and there's no way around that," Zuckerberg said in a post on Facebook on Tuesday. "It will mean saying goodbye to talented and passionate colleagues who have been part of our success. They've dedicated themselves to our mission and I'm personally grateful for all their efforts. We will support people in the same ways we have before and treat everyone with the gratitude they deserve."
Zuckerberg said the company will also close around 5,000 open job positions it has yet to fill and said Meta will lay off more members of its recruiting team — a sector of the company that was hit hard by the company's previous layoffs.
The CEO said members of Meta's recruiting team will be notified of their employment status on Wednesday, while other restructuring efforts will be put in place by late April or May.
In his message to employees, Zuckerberg warned that the company might be looking to pare down expenses for some time to come.
"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years," he wrote in the message that was posted on Facebook. "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. Given this outlook, we'll need to operate more efficiently than our previous headcount reduction to ensure success."
With the new cuts, Meta's headcount is closer to where it was two years ago. Shares of Meta were up over 5% on Tuesday morning.
While the breadth of the November layoffs came as a surprise to many Meta employees, this second round has been expected internally since at least January, as Insider first reported.
One of the early signs more cuts were on the way was an internal mandate for team managers and directors to label more workers in lower ranking categories during performance reviews, as Insider reported. Those reviews just wrapped up earlier this month. Then the company continued to find ways to cut costs, pulling back on perks and benefits.
Zuckerberg announced during fourth quarter earnings that 2023 would be Meta's "year of efficiency" and that he didn't want the company to be one of "managers managing managers." Even talk of building the Metaverse and the related cost was tempered for the first time since the company changed its name in 2021.
In recent weeks, talk inside the company had turned to "the flattening," referring to Zuckerberg's call for the removal of layers of management at Meta, and Facebook in particular, as Insider reported. The company took open management roles and changed them to non-management positions as managers prepared to be demoted.
The idea of cutting costs is new for Meta, which has grown massively since its founding almost 20 years ago. The pandemic drove even more growth, but an uptick in usage trends did not last. When Apple rolled out its iOS privacy changes, leading to a $10 billion hit on Meta's business, investors became increasingly frustrated with the massive cost associated with the metaverse. At the time, Zuckerberg still struck a defiant tone about investing in the metaverse.
Meta's first round of layoffs was seen largely as a concession to Wall Street. Its stock price has trended upward ever since. Speaking last month during earnings, Zuckerberg said he was "surprised" by the positive effect of the layoffs, which cut costs, as well as improved communication and progress on future products at Meta.
"It's made information flow through the company better, and it will help us make better products and attract and retain better people," he said. "That was honestly a little surprising to me — that as we started digging into this, the company felt better to me."
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