'Thousands' at Meta face layoffs this week
Sorry, you're Zucked
Meta Platforms, parent of Facebook, Instagram, and WhatsApp, architect of a metaverse, aggregator of eyeballs, is said to be preparing to layoff employees again.
According to a report from Bloomberg, Meta intends to part ways with "thousands of employees" as soon as this week. The report suggests Meta executives are working on a layoff plan to present to CEO Mark Zuckerberg prior to his planned paternity leave for the birth of his third child.
Meta, when asked about this, declined to comment.
CEO Mark Zuckerberg in a statement last month for his company's Q4 2022 financial results described his strategic goals thus: "[O]ur management theme for 2023 is the 'Year of Efficiency' and we're focused on becoming a stronger and more nimble organization."
The expected jobs cuts follow an even larger dismissal in November when the company dumped 13 percent of its staff, or about 11,000 workers. The company's headcount as of December 31 was 86,482, which includes most of those scheduled to be jettisoned in the November purge.
At the time, Zuckerberg issued a message to explain the employee disposal. "I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go," he said. "Overall, this will add up to a meaningful cultural shift in how we operate."
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One aspect of that shift has involved asking employees who spend most of their time outside the office to share desks as a way to reduce the company's real estate costs. In its Q4 2022 earnings report Meta said it expects to spend $1 billion on restructuring charges this year related to consolidating its office facilities.
Tossing office space comes at a cost, though not nearly as much as the Meta Quest headset maker has spent trying to build a connected set of virtual environments. Last year, Meta posted an operating loss of $13.72 billion for its Reality Labs division. And with the disclosure of its Q3 2022 results in October last year, the company said, "We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year."
In 2022, Meta's costs and expenses grew by 23 percent while its revenue declined one percent. And restoring past levels of revenue by selling personalized ads looks like it will be difficult now that the company's approach to targeted advertising has been found to violate EU law.
Last December, in a Stanford News interview, Jeffrey Pfeffer, professor at Stanford Graduate School of Business, opined that tech companies are just laying people off because other tech companies are doing so. And he pointed to a study showing that layoffs are the result of companies imitating one another without a rationale for doing so.
Layoffs do not cut costs, increase stock prices, or boost productivity, he said, characterizing mass job cuts as a bad decision, one that actually kills people through increased mortality in the decades following termination.
Allowing that there may be a tech recession, that company valuations were too high, and that Meta may have over-hired, Pfeffer said that's not the reason tech companies are cutting jobs.
"Meta has plenty of money," he said. "These companies are all making money. They are doing it because other companies are doing it." ®