Meta plans to cut thousands of jobs, after CEO predicted no more layoffs
The Washington Post February 22, 2023
Facebook parent company Meta is preparing for a fresh round of job cuts, deputizing human resources, lawyers, financial experts and top executives to draw up plans to deflate the company’s hierarchy, in a reorganization and downsizing effort that could affect thousands of workers.
Meta plans to push some leaders into lower-level roles without direct reports, flattening the layers of management between Meta CEO Mark Zuckerberg and the company’s interns, according to a person familiar with the matter who spoke on the condition of anonymity because they were not authorized to speak on about internal matters. Other managers may end up overseeing a higher number of employees as their teams grow bigger. Some inside Meta expect employees whose jobs have been converted to eventually quit, trimming the company’s workforce by default.
In addition to targeting managers, the company is also considering more traditional cuts, including slashing some projects and jobs, the person said. These efforts, which are targeted at divisions across the company and around the world, may not happen on a single day, but will likely roll out across the company in the coming months.
Meta spokesman Dave Arnold declined to comment but directed The Washington Post to previous public comments from Zuckerberg in which he said the company needed to become more efficient.
“We closed last year with some difficult layoffs and restructuring some teams,” Zuckerberg told investors earlier this month. “When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end.”
The job eliminations arrive after Zuckerberg sought to reassure workers that he didn’t “anticipate more layoffs” after the company slashed 11,000 jobs — roughly 13% of its workforce — in November. At the time, Zuckerberg told remaining employees the company had made a substantial cut to “minimize the chance of having to do broad layoffs like this for the foreseeable future,” employees at the time, according to a recording of the companywide meeting reviewed by The Washington Post.
“I obviously can’t sit here and promise you that nothing will happen in the future because it’s a very volatile environment,” he added. “But what I can say is that for where we are right now, that’s was I foresee.”
But earlier this month, Zuckerberg proclaimed 2023 the “year of efficiency,” promising investors he would trim middle management and speed up the company’s decision-making, hinting at the possibility of more cuts.
Meta executives are evaluating the cheapest way to accomplish the most necessary tasks, the person said. The cuts are expected to disproportionately affect workers in non-engineering roles, they added, and leaders will use a wide range of factors, including performance ratings, job duties, and compensation to identify places to slash.
In addition to trimming its workforce, Meta has also been reshuffling its top leaders. Earlier this month, Meta Chief Business Officer Marne Levine announced she was leaving the company after 13 years. The company said vice presidents Nicola Mendelsohn and Justin Osofsky would take on expanded roles in overseeing Meta’s advertising and sales divisions. They report to chief operating officer Javier Olivan, who took on that role after last year’s departure last year of former chief operating officer Sheryl Sandberg.
Meta’s newest efforts to cut costs is part of a larger wave of tech companies that have slashed jobs in recent months. Last month, Google’s parent company Alphabet announced it was cutting 12,000 jobs, which was about 6% of its workforce. Microsoft also recently announced it was cutting 10,000 employees while Amazon said it was eliminating 18,000 workers.
Meta’s business, which relies on advertising, has been hit particularly hard by a steady stream of economic challenges. Some digital advertisers have pulled back on spending as inflation continues to create market instability while the company over estimated the future growth of the e-commerce market. Meta also took a hit when Apple introduced new privacy restrictions that forced app-makers to explicitly ask users to track their online activity, hurting the social media giant’s ability to offer targeted advertising.
Meta is also increasingly fending off competition for marketing dollars and users from upstart social media rivals, such as the short-form video network TikTok. Last year, the company reported that the flagship Facebook app lost daily users for the first time in its 18-year history, though user growth later recovered. Earlier this month, Meta posted its third straight quarterly revenue decline during the final months of 2022.
On Sunday, Zuckerberg unveiled a new subscription service, asking users to pay $11.99 or $14.99 a month to have their accounts verified and obtain access to customer support. The company plans to roll out the service in Australia and New Zealand this week.
Meanwhile, Meta’s long term bet to build out immersive digital worlds known as the metaverse, is still loosing money. The social media giant said last year it expects that Reality Labs, the internal division overseeing its virtual reality-powered devices such as its Quest headsets, will lose more money this year than it did last year. Meta will face formidable competition with the reported upcoming release of a rival headset by Apple.