- Meta, the parent company of Facebook, Instagram, and WhatsApp, is preparing to cut thousands of jobs, impacting 13% of its global workforce.
- The news comes mere weeks after weak performances from Facebook and Instagram saw $80 billion wiped off the market value of Meta. Its share price decreased to less than a third of what it was at the beginning of the year.
Meta confirmed earlier reports about the layoffs and announced it would cut its global workforce by 13%, leading to 11,000 employees losing their jobs.
Meta CEO Mark Zuckerburg said in a statement that the company has already sought to reduce costs across the business, including scaling back budgets, reducing perks, shrinking their real estate footprint, and restructuring teams to increase efficiency.
However, Zuckerburg conceded that these measures alone would not bring their expenses in line with their revenue growth. He added that the company would also be taking several additional steps to become leaner and more efficient by cutting discretionary spending and extending our hiring freeze through Q1.
Third Quarter Results 2022
Meta’s poor third quarter 2022 results represent the second consecutive quarter of decreasing revenue for the company. Third-quarter revenue reduced to $27.71 billion, a decrease of 4% year-over-year, while net income fell 52% to $4.4 billion.
Some of the most significant losses of the company were recorded by Reality Labs, the division responsible for developing the Metaverse, which saw its revenue reduce by almost half from a year.
In the third quarter alone, the division suffered a revenue loss of $3.7 billion, bringing its total annual losses to $9.4 billion. Meta expected these losses would grow majorly every year from 2023.
He added that Meta expects to end 2023 as either roughly the same size or even a slightly smaller organization than it currently is.
Cutting The Workforce Is Usually An “Easy Option”
Discussing the state of the hiring landscape back in August, Jack Kelly, founder and CEO of The Compliance Search Group and Wecruiter.io said that when businesses need to take steps to alleviate poor economic conditions, reducing costs within the workforce is often an easy go-to option.
The expected job cuts at Meta come hot on Twitter’s new owner Elon Musk firing almost half of the social media platform’s workforce after his first week in charge.