The rumors have been confirmed today as Meta Platforms is confirming today that it will be laying off thousands of employees “over the next couple of months” as it keeps moving forward with its reorganization efforts.
The company shared the news in a detailed press release published this morning where its founder and Chief Executive Officer, Mark Zuckerberg, highlighted the two primary goals of its pledged “year of efficiency”.
These are to make Meta a better tech firm and to improve the financial performance of its business to ensure that its long-term vision can be appropriately executed.
Meta is Embarked in a Full-Blown Restructuring
According to Zuckerberg, around 10,000 people will be parting ways with the company this time while a total of 5,000 open job positions will be closed – these are roles that have not been filled yet and that the company will reassess to make sure they are still a priority.
The tally of laid-off workers will now increase to 21,000 in just five months once Meta completes these recently announced involuntary departures.
Other measures are being implemented by the leadership team to right-size Meta Platforms (META) including the cancelation of “low priority projects” and a reduction in the firm’s hiring rate. The recruiting team is being downsized as well.
The timeline for these actions to be fully executed will vary from one location, department, and business unit to the other as the company. However, the layoffs are expected to be completed by the end of May across the entire organization.
“This will be tough and there’s no way around that”, Zuckerberg warned. Once these latest actions are done, Meta will be lifting its hiring and transfer restrictions for each business unit and will reassess its work model to support hybrid work.
“As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs – and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision”, the head of the parent company of Instagram and WhatsApp asserted.
Zuckerberg Shares More Details About What a “Year of Efficiency” Implies
Meta’s top boss has been progressively outlining what a “year of efficiency” means in practice for his company. In previous statements, Zuckerberg has said that the company’s short-term mission is to leverage the power of AI not just for its products and services but also to work more productively from an organizational standpoint.
Today, Zuckerberg is adding new elements to the list of changes he is making to the company’s inner works starting with increasing the number of people that report to a single manager to at least ten.
Prioritizing projects is another big thing happening within Meta as low-priority endeavors will be completely shut down as Zuckerberg has realized that these side projects consume too many resources that can otherwise be employed more efficiently into what the company considers a top priority at the moment.
The company is also deepening its research into what works in terms of its work methodologies. Thus far, it has found that engineers who were initially attending a physical office and were then shifted to a remote working model performed better than those who started out remotely.
This may encourage the company to let new engineers spend a bit of time at the office – three days a week at least – in the beginning before they are transitioned to a fully remote work model.
Zuckerberg also weighed on the current macroeconomic situation and commented that the company should be prepared for the possibility that this “new economic reality” could continue as is for many years.
“In the face of this new reality, most companies will scale back their long term vision and investments. But we have the opportunity to be bolder and make decisions that other companies can’t”, Zuckerberg stated.
He added: “So we put together a financial plan that enables us to invest heavily in the future while also delivering sustainable results as long as we run every team more efficiently. The changes we’re making will enable us to meet this financial plan”.
Meta Shares Guidance for 2023 Costs and Expenses
In addition to this announcement, Meta shared guidance for its full-year operating expenditures, which are expected to end the year somewhere between $86 and $92 billion compared to a previous estimate of $89 to $95 billion. In 2022, the firm’s total costs and expenses ended at $87.7 billion.
The cost of the firm’s restructuring efforts is expected to be around $3 to $5 billion including severance payments and other similar expenditures. During the last quarter of 2022, Meta spent $4.2 billion in restructuring expenses. This included personnel costs related to its decision to let go of 11,000 people in November and early terminations of certain real estate contracts.
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