Meta to Layoff 4,000 Employees in Effort to Cut Costs and Focus on Metaverse
Meta, the parent company of Facebook, Instagram, and WhatsApp, will begin a significant round of layoffs potentially affecting approximately 4,000 employees. CEO Mark Zuckerberg has named the “year of efficiency” as the overarching restructuring plan at Meta, which includes the recent layoffs. In March, Zuckerberg announced that the company would be reducing its workforce by 10,000 employees in the upcoming months, specifically targeting those working on “low priority projects.” In addition to the 11,000 jobs that were eliminated in November. The layoffs will not be limited to just Facebook but are expected to also impact various technical teams across other Meta-owned platforms such as Instagram, Reality Labs, and WhatsApp. The job cuts will begin today, and employees affected by the job cuts will be notified today, with different processes in place for workers outside North America.
According to an internal memo seen by Vox, North American Meta employees will be informed by email on Wednesday between 04:00 and 05:00 a.m. PT. According to reports, the company is requesting employees who have the ability to work remotely to do so, in order to offer those impacted with sufficient time and privacy to cope with the news. Lori Goler, Meta’s Head of People, said in the memo, “This will be a difficult time as we say goodbye to friends and colleagues who have contributed so much to Meta. It will take time for everyone—both those leaving and those staying—to process tomorrow’s news, and I know teams will show up for each other with compassion, support, and care.”
The layoffs come after Meta CEO Mark Zuckerberg announced in March that the company would be cutting 10,000 more jobs in the coming months, on top of the 11,000 cuts in November. In April, Zuckerberg had stated that the cuts would affect the technology departments, while the upcoming round of cuts in May would target the business aspect of the company. At the end of last year, Meta had around 86,000 employees.
Zuckerberg announced in March that the company will eliminate 10,000 positions as part of its cost-cutting efforts, and this move is a part of that plan. Another set of reductions is scheduled to take place in May. Despite facing an online advertising slowdown, Meta is investing billions of dollars each quarter towards creating metaverse technology, taking a significant and uncertain gamble on a developing market that has not yet gained widespread acceptance. During the last quarter, Meta’s Reality Labs division, which is responsible for constructing the metaverse, suffered a $4.28 billion loss, contributing to the division’s total losses of $13.72 billion for the year 2022.
That could be a strategic pivot for Meta and Zuckerberg, both of which have promoted the metaverse as a place for social interactions, work, and e-commerce. Instead, Zuckerberg promoted the metaverse for social interactions, work, and e-commerce through avatars in its new platform Horizon Worlds. But the Horizon avatars have been ridiculed as too cartoonish, and the product has not seen widespread adoption. The company reported its usage figures in February 2022, stating that it had 300,000 users per month.
While the company has acknowledged that operating losses are expected for Reality Labs, the division responsible for virtual reality offerings, the company has struggled to grow an audience for virtual reality and has stated that much of the technology needed to power the metaverse will take years to develop.
In conclusion, the layoffs announced by Meta are part of a broader restructuring effort aimed at cost-cutting and efficiency. The company has struggled with an online ad slump and is investing billions in developing technology for the metaverse, which has yet to gain mainstream adoption. The layoffs will impact technical teams across various Meta-owned platforms, and the move is part of a broader plan to cut 10,000 jobs. A further round of cuts is expected in May.
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