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In a nutshell: Meta is laying off thousands more employees as it continues "restructuring" efforts. Last November, Mark Zuckerberg blamed himself for firing thousands of workers. This time, the company is eliminating around the same number because of "higher interest rates," "geopolitical instability," and "increased regulation."
On Tuesday, Mark Zuckerberg personally announced another round of layoffs through his Facebook page. Meta has been in the middle of a restructuring effort since eliminating about 11,000 positions last November. The CEO says that this time the company is looking to eliminate another 10,000 employees, which is about 13 percent of its workforce.
Both rounds of cuts followed a period of unchecked hiring during the pandemic when there was a massive spike in Instagram and Facebook app usage. From April 1, 2020, until last November's layoffs, Meta hired nearly 40,000 new employees, ballooning its workforce by over 81 percent.
Meta plans to stagger the current cuts into three phases to make for a smoother transition than letting everybody go simultaneously. Since it is downsizing, there is less need for active recruiters, so Meta will begin by cutting recruiting staff starting tomorrow. It will eliminate tech positions in April and business roles in late May.
In addition to the new layoffs, Meta took down around 5,000 current job postings and plans to cancel several "lower priority" unnamed projects. Additionally, Zuckerberg mentioned that the company would reduce its hiring rates, but that goes without saying.
According to an 8-K filing with the Securities And Exchange Commission, the company expects the cuts to shave about $3 billion off its total expenses for 2023, including the $3-5 billion "related to facilities consolidation charges and severance and other personnel costs."
Meta wants to finish an analysis of its recent hybrid work experiment by this summer to evaluate its efficiency and expects to complete its move to a leaner machine by the end of the year. After the restructuring, the company will lift hiring and transfer freezes.
Despite the cuts, Zuckerberg is still betting big on his Metaverse plans. The Quest 3 is still on track for a 2023 launch. The company also plans several future AR and VR products, including multiple sets of AR glasses tentatively due out between 2024 and 2028.
The CEO indirectly blamed the cuts on the Federal Reserve Board for raising interest rates leading to a "leaner-running" economy. He also attributed the restructuring to "geopolitical instability" and increased regulation, off-handedly warning that there could be more to come.
"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years. 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. Given this outlook, we'll need to operate more efficiently than our previous headcount reduction to ensure success."
The total cuts since November equate to only about half of the employees gained during Meta's pandemic-induced hiring spree. Considering the economic outlook was much better before 2020, more "restructuring" could come if the overall economy's health doesn't improve.