Meta Platforms Inc. (parent company of Facebook) is planning to begin large-scale layoffs this week, according to people familiar with the matter, in what could be the largest round in a recent spate of tech job cuts after the industry’s rapid growth during the pandemic, The Wall Street Journal reported.
According to The Wall Street Journal, 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. Meta reported more than 87,000 employees at the end of September. Company officials already told employees to cancel nonessential travel beginning this week, the people said.
The Wall Street Journal also reported that the planned layoffs would be the first broad head-count reductions to occur in the company’s 18-year history. While smaller on a percentage basis than the cuts at Twitter Inc. this past week, which hit about half of that company’s staff, the number of Meta employees expected to lose their jobs could be the largest to date at a major technology corporation in a year that has seen a tech-industry retrenchment.
The New York Times reported that Meta plans to lay off employees this week, three people with knowledge of the situation said, adding that the job cuts were set to be the most significant at the company since it was founded in 2004.
According to The New York Times, it was unclear how many people would be cut and in which departments, said the people, who declined to be identified because they were not authorized to speak publicly. The layoffs were expected by the end of the week. Meta had 87,314 employees at the end of September, up 28 percent from a year ago.
Why the job cuts? The New York Times explained that Meta has been struggling financially for months and has been increasingly clamping down on costs. The Silicon Valley company, which owns Facebook, Instagram, What’s App and Messenger, has spent billions of dollars on the emerging technology of the metaverse, an immersive online world, just as the global economy has slowed and inflation has soared.
In addition, digital advertising – which forms the bulk of Meta’s revenue – has weakened as advertisers have pulled back, affecting many social media companies. Meta’s business has also been hurt by privacy changes that Apple enacted, which have hampered the ability of many apps to target mobile ads to users.
Are we looking at the end of the biggest social media giants? Massive layoffs are never a good sign for any company. It indicates that the company is losing money so quickly that it feels the need to fire a massive amount of its workforce. Meta pretty much did this to itself, by basing the majority of its income on the money it got from ads, which are less lucrative now since Apple’s changes. Twitter, on the other hand, is dealing with the chaos of Elon Musk’s choices.