It’s not culling half of its workforce, like Twitter did last week, but Meta too is reportedly looking to cut a heap of roles this week, as part of its own cost rationalization efforts.
As reported by The Wall Street Journal:
“Meta is planning to begin large-scale layoffs this week, according to people familiar with the matter […] The layoffs are expected to affect many thousands of employees and an announcement is planned to come as soon as Wednesday, according to the people.”
Of course, Meta is far larger than Twitter, which, as noted, cut some 3,000 jobs late last week as part of the Elon Musk transition (and is now asking at least of them to come back). Meta employs over 87,000 people in total, so while cutting thousands of roles will still be a significant reduction, in percentage terms, the impact will likely be marginal on its much larger business.
Meta’s been threatening to cut roles for some time, as it faces increasing pressure to maximize profit amid worsening economic conditions, and a shifting data privacy landscape. For example, Meta has projected that it will lose some $10 billion this year alone as a result of Apple’s data privacy prompts, which have seen many users cut Meta off from tracking their activity in its apps.
Back in July, Meta CEO Mark Zuckerberg warned staff to prepare for ‘one of the worst downturns that we've seen in recent history’. Zuckerberg said that the company would slow hiring, while he also suggested that staff consider their employment options.
"Some of you might decide that this place isn't for you, and that self-selection is OK with me. Realistically, there are probably a bunch of people at the company who shouldn't be here."
Since then, Meta has halted its social audio push, cut its ‘Bulletin’ newsletter initiative, and canceled its multi-million dollar deals with news publishers among other cost-saving measures. And now, it’s looking to reduce costs direct – which some investors have actually been calling for in recent months.
Brad Gerstner, the founder and CEO of Altimeter Capital, which holds some 2 million Meta shares, recently published an open letter to Zuckerberg, in which he called on the company to cut 20% of its staff, and slow metaverse spending, in order to get its finances back on track.
The latter seems unlikely, as Meta’s VR development costs continue to stack up, but it’s not overly surprising to see Meta looking to make a move on the first element, which Zuckerberg is more likely to action than he is to revert from his longer-term metaverse vision.
Because Zuck sees that as the future, as, seemingly, something like fate.
As Zuckerberg told Protocol earlier this year:
“I want to live in a world where big companies use their resources to take big shots. Obviously, if people invest in our company, we want to be profitable for them. If employees join our company, I want to make sure that ends up being a good financial decision for them, too. But I also feel a responsibility to go for it. Use the position that we're in to make some bets, and try to push forward in a way that other people might not.”
Even amid mounting expenses, Meta remains focused on its future vision, which could well end up being the future of how we connect, positioning Meta to capitalize on such for years to come.
But in the short-term, it means that costs are tightening. And even a company of Meta’s scale still needs to be increasing its bottom line.
The cuts will be another blow to the once booming tech sector – though from another perspective, it could be the inflection point that leads to the next big tech shifts.
Amid the development of Web3, and related technologies, and evolving VR and AR experiences, there may well be new opportunity for many of these experienced tech workers to step into the next big development, and guide the future in all new ways.
Which could also see the next big advances coming from outside of the established tech giants.
That, of course, won’t make it any easier for those that are without a job right now, but in a broader scope, this could be the spark that triggers the next big habitual trend.