Meta is reportedly planning layoffs that will dwarf last week’s Twitter decimation.
According to the Wall Street Journal, Mark Zuckerberg‘s company plans to pink-slip “many thousands” of workers in its first-ever large-scale round of layoffs.
Meta has nearly 90,000 employees. It picked up 27,000 to handle increased COVID traffic in 2020 and 2021, and has hired another 15,000 so far this year.
Subscribe to get the latest creator news
Back in June, Zuckerberg told employees that “Realistically, there are probably a bunch of people at the company who shouldn’t be here,” and that they should brace for an “intense period” for the next 18 to 24 months.
Apparently time’s up for those people. The WSJ reports that layoffs could begin as soon as this Wednesday; people familiar with the matter told the outlet they have already been instructed to cancel nonessential travel plans.
It’s not clear how many people will be impacted, but it’s worth noting a previous Wall Street Journal report indicated Meta wants to cut overall expenses by 10% in the next few months.
Stockholders seem pleased with the idea that Zuck will cut some people loose: Meta stocks rose by nearly 5% this morning—though that isn’t saying too much, considering those same stocks have lost more than 70% of their value since January.
The decline in stock price—and shareholder satisfaction—has been in part due to Meta’s consistently increasing costs. As the WSJ points out, its free cash flow plummeted by 98% last quarter due to investments in Instagram‘s TikTok competitor Reels and Reality Labs, the virtual reality/metaverse tech arm of Meta that can’t generate legs yet.
Some shareholders have expressed distaste for Meta’s metaverse plans. Last month, the CEO of longtime investor Altimeter Capital wrote an open letter to Zuckerberg where he said “people are confused by what the metaverse even means,” and encouraged Meta to “limit” investment in it, as well as decrease staff expenses by “at least 20%” (with “at least” pointedly bolded).
Meta declined to comment about the potential layoffs, but directed the WSJ to Zuckerberg’s recent comments saying Meta plans to “focus our investments on a small number of high priority growth areas,” which means “most […] teams will stay flat or shrink over the next year.”