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Meta confirmed plans Tuesday to lay off approximately 10,000 more employees — expanding a bloodbath that began with about 11,000 job cuts last November.
The Facebook and Instagram parent will also close about 5,000 open roles as part of top boss Mark Zuckerberg’s latest major cost-cutting push.
“Here’s the timeline you should expect: over the next couple of months, org leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates,” Zuckerberg confirmed in a memo titled “Update on Meta’s year of efficiency.”
Meta shares rose nearly 6% in early trading on the announcement. Investors have had a positive reaction to the company’s belt-tightening efforts, with shares surging more than 53% since the start of the year.
In February, Zuckerberg proclaimed 2023 Meta’s “year of efficiency” and hinted that more cuts were likely.
In his memo, Zuckerberg acknowledged that employees will likely find his latest cost-cutting announcement “surprising.”
“At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” Zuckerberg said.
“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 added.
In an SEC filing, Meta said it expects lower full-year expenses in 2023 of between $86 billion and $92 billion following the cuts, down from a previous range of $89 billion to $95 billion.
The company said its estimate “is inclusive of restructuring costs of approximately $3-5 billion related to facilities consolidation charges and severance and other personnel costs.”
Zuckerberg has admitted the tech giant hired too aggressively during a pandemic-era boom in tech valuations. The company had its worst year on record in 2022 as it navigated a troubled shift toward costly metaverse technology despite sagging revenue and worsening economic conditions.
As part of its cost-cutting effort, Zuckerberg has also begun an internal process known as “flattening” to remove layers of middle management at the company.
Meta is giving middle managers an ultimatum to either shift to a non-managerial “individual contributor” role at the company or exit altogether, Bloomberg reported last month.
Meta is one of several tech giants, including Amazon and Google parent Alphabet, that have slashed jobs in response to a downturn in the tech sector.
Meta and its rivals have faced criticism over their hiring practices given the recent wave of layoffs.
Billionaire tech CEO Thomas Siebel is among the vocal critics, stating that the jobs cuts were a clear indicator that “craziness” was leaving the tech sector.
Siebel told Insider that companies such as Meta and Google had over-hired even though they “didn’t have jobs for these people.”
“They really were doing nothing working from home,” argued Siebel, the CEO of AI firm C3.ai.