Meta chops another 10,000 employees, closes 5,000 vacancies
The Year of Efficiency may also include sending engineers back into the office
Meta – which claims without irony to be "building the future of human connection" – is laying off 10,000 more staff and will close open vacancies on 5,000 roles as it hunkers down for a "Year of Efficiency."
This is the second time Meta has cut jobs to slash costs, the first coming in November when CEO Mark Zuckerberg axed 11,000 roles after admitting the group hired too rapidly early in pandemic and needs to reduce expenses in a cooling economy.
In an email to employees – also sent to the SEC [PDF] – the Meta boss today said the goal of efficiency is to "improve our financial performance in a difficult environment" and "make us a better technology company."
"Overall, we expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven't hired yet," he writes.
Bear in mind Meta employed about 87,000 people late last year, followed by those 11,000 cuts and now this 10,000 chop. That's a 25 percent drop from before the layoffs began, after a period of massive hiring.
Zuck says that year after year, Meta expanded revenues but last year was a "humbling experience" because the "world economy has changed and competitive pressures grew, and our growth slowed considerably."
In calendar 2022, Meta reported revenue of $116.7 billion, down 1 percent year-on-year and a 38 percent plunge in operating profit to $28.94 billion. A marked difference to prior financial years.
"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years. Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation. Given this outlook, we'll need to operate more efficiently than our previous headcount reduction to ensure success."
To deal with any resulting anxiety from the layoffs, kindly old Zuck says he is going to make the changes "as soon as possible in the year" to get the bad stuff done and "focus on the critical work ahead."
A leaner org will execute its highest priorities faster. People will be more productive, and their work will be more fun and fulfilling
Senior leaders will announce the details of the restructuring plans "focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates. With less hiring I've made the difficult decision to further reduce the size of our recruiting team." Those in recruitment will be in for a fun night tonight as they will be told who is in and out by tomorrow.
"We expect to announce restructurings and layoffs in our tech groups in late April, and then our business groups in late May. In a small number of cases, it may take through the end of the year to complete these changes. Our timelines for international teams will also look different, and local leaders will follow up with more details."
"This will be tough and there's no way around that," said the CEO, whose personal fortune stands at $64.4 billion. "It will mean saying goodbye to talented and passionate colleagues who have been part of our success."
Following the restructuring, Meta plans to "lift hiring and transfer freezes" in each group.
Removing jobs has an obvious impact on the balance sheet, but how do layoffs help to build a better company? Zuck says the flatter org chart will help by removing layers of middle management. As such Meta will also ask managers to become "individual contributors."
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"It's well-understood that every layer of a hierarchy adds latency and risk aversion in information flow and decision-making. Every manager typically reviews work and polishes off some rough edges before sending it further up the chain."
In another pillar to its Year of Efficiency (YoE) marketing plan, Zuckerberg also reckons "leaner is better." After chopping 13 percent of the workforce in November, "one surprising result is that many things have gone faster. In retrospect, I underestimated the indirect costs of lower priority projects."
He adds: "A leaner org will execute its highest priorities faster. People will be more productive, and their work will be more fun and fulfilling. We will become an even greater magnet for the most talented people. That's why in our Year of Efficiency, we are focused on canceling projects that are duplicative or lower priority."
The CEO thinks that as Meta has grown it has hired outside of its software engineering heartland and diluted the focus on the business. "As part of the Year of Efficiency, we're focusing on returning to a more optimal ratio of engineers to other roles. It's important for all groups to get leaner and more efficient to enable our technology groups to get as lean and efficient as possible. We will make sure we continue to meet all our critical and legal obligations as we find ways to operate more efficiently."
Investment in tools, including AI, is another priority for Meta under YoE to help engineers "write better code faster, enabling us to automate workloads over time, or identifying obsolete processes that we can phase out."
Engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week
Borrowing a leaf out of Amazon's get-back-to-the-office playbook, Zuck says Meta analysis has shown that engineers who joined Meta before the pandemic and worked in-person are performing better than those that joined during the pandemic and work remotely.
"This analysis also shows that engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week. This requires further study, but our hypothesis is that it is still easier to build trust in person and that those relationships help us work more effectively.
"As part of our Year of Efficiency, we're focusing on understanding this further and finding ways to make sure people build the necessary connections to work effectively. In the meantime, I encourage all of you to find more opportunities to work with your colleagues in person."
Zuckerberg started off today's announcement by claiming Meta is "building the future of human connections." It seems like those that aren't being canned will be expected to go into the office more often. Maybe he was referring to that. He can't mean his social media platforms, surely to goodness. ®