Meta staff brace for more layoffs as budgets delayed: Report
Facebook parent Meta made its biggest layoffs ever last November, laying off around 11,000 workers. But more jobs, it seems, are about to be cut.
CEO Mark Zuckerberg noted in a Facebook post on Feb. 1, “We ended last year with some tough layoffs and restructuring some teams. When we did that, I made it clear that this was the beginning of our focus on efficiency and not the end.” During an earnings call that same day, he announced that 2023 would be Meta’s “year of efficiency.”
As Meta workers wonder who will be deemed ineffective, the company has delayed finalizing several teams’ budgets, according to the Financial Times. Employees who spoke to the British newspaper on condition of anonymity said morale at the company was low and some teams were getting little work done while they awaited abnormally slow budget decisions.
Meta declined to comment when contacted by Fortune.
“Honestly, it’s still a mess,” one employee told the FT. “The Year of Efficiency kicks off with a bunch of people getting paid to do nothing.”
Other workers told the newspaper the next job cuts are expected next month.
Middle managers have reason to be nervous.
‘More proactive about cutting projects’
Zuckerberg wrote in his Facebook post, “We are working to flatten our organizational structure and remove some layers of middle management to make decisions faster, as well as deploy AI tools to help our engineers be more productive. As part of this, we will be more proactive in cutting projects that are not performing or may no longer be as crucial, but my main focus is to increase the efficiency of how we execute our top priorities.”
One of those priorities is the metaverse, a largely unrealized virtual world that has suppressed users and could take years to become profitable, if ever. The company’s metaverse division, Reality Labs, posted a loss of $13.7 billion for 2022, up from a loss of $10.2 billion in 2021.
Investors tried to pressure Zuckerberg to scale back the metaverse investments, without success.
In December, John Carmack, a virtual reality pioneer, left his high-level consulting role at Meta, where he had been working on the metaverse. He tweeted on his way out, “I’ve always been pretty frustrated with how things are done at FB/Meta. Everything needed for spectacular success is there, but it is not put together effectively.”
Slow going with the metaverse and three consecutive quarters of year-over-year revenue declines, however, is not stopping the buyback of shares at Meta. In its latest earnings statement, Meta said it increased its share buyback authorization by $40 billion, noting that it bought back about $28 billion last year.
Many tech companies that overhired during the pandemic as demand for the services surged have made major layoffs in recent months, leading to a sense of conflicting news as the latest U.S. jobs report showed the lowest unemployment in 50 years tone.
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