As uncertainty about the global economy hits the technology sector particularly hard, Facebook parent Meta is laying off another 10,000 workers, roughly the same number as the social media company announced late last year in its first round of layoffs.
In November, the company announced 11,000 job cuts, accounting for roughly 13% of its workforce at the time. Aside from the layoffs, Meta announced on Tuesday that it would not fill 5,000 open positions.
The Menlo Park, California-based company announced Tuesday that it will reduce the size of its recruiting team and make additional cuts in its tech groups in late April, followed by its business groups in late May.
“This will be difficult, and there is no getting around it,” CEO Mark Zuckerberg said. “It will mean bidding farewell to talented and passionate colleagues who have contributed to our success.”
A representative for Meta told CBC News that the company had no further comment. It is unclear whether layoffs will affect its Canadian operations.
According to an analyst, Zuckerberg is stepping back for investors.
Meta and other tech companies have been aggressively hiring for at least two years, but have recently begun to let some of those employees go. Hiring in the United States remains strong, but layoffs have been severe in some industries.
Meta reported declining profits and revenue for the third consecutive quarter early last month. On the same day, the company announced that it would repurchase up to $40 billion in its own stock.
Zuckerberg has spent tens of billions of dollars developing its metaverse, or virtual reality concept, and renamed the company Meta, signaling a shift in Facebook’s focus.
“As I’ve talked about efficiency this year, I’ve said that part of our work will involve job elimination — 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,” Zuckerberg explained.
According to Dan Ives, managing director of New York-based investment firm Wedbush Securities, Zuckerberg is backtracking on his metaverse strategy at a time when investors want to see cost-cutting.
“They don’t want to see companies spend like 1980s rock stars, which is ultimately what Metal has done,” Ives explained. According to him, the industry is experiencing a shift in priorities.
The “The clock struck midnight, not just for Meta, but for the rest of big tech as well. And I believe that’s what we’re seeing across the board, as efficiency has surpassed growth as the most important word “He stated.
Big Tech’s New Economic Reality
The biggest tech companies in the United States are also cutting costs elsewhere.
Following the largest round of layoffs in the company’s history and its shifting plans around remote work, Amazon paused construction on its second headquarters in Virginia this month.
Global inflation has remained stubborn, making decisions more difficult for both households and businesses in the United States.
Fast-growing businesses, including many in the technology sector, are bracing for what could be a prolonged period of poor economic conditions.
“At this point, I believe we should brace ourselves for the possibility that this new economic reality will persist for many years,” Zuckerberg wrote in an email to employees.
Meta shares were up 6% in early trading on Tuesday.
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