Zuck’s ‘Year of Efficiency’ Marches On: Facebook Axes Another 10,000 Workers
Facebook (now known as Meta) plans to lay off another 10,000 workers in a bid to improve its financial performance. This is Zuckerberg’s second wave of layoffs following November’s cut of 11,000 jobs as part of his “year of efficiency” at the internet giant.
Business Insider reports that Facebook has announced another round of layoffs, this time cutting 10,000 workers in an effort to improve the company’s financial position. This follows a mass layoff of 11,000 workers in November of last year, which CEO Mark Zuckerberg described at the time as “a last resort.” A total of 5,000 open job positions that Meta has yet to fill will also be closed by the company. Zuckerberg declared 2023 to be the “year of efficiency,” and the ongoing layoffs appear to be a central part of his strategy.
In a post on Facebook on Tuesday, Zuckerberg stated that cuts would have to be made to improve the company’s performance in a challenging financial environment. The CEO warned that the company might be looking to reduce expenses for some time, saying: “At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.”
According to Insider, the new round of layoffs had been anticipated internally at least since January. In order to reduce costs, the company forced team managers and directors to place more employees in lower-ranking categories during performance reviews. It then continued to look for other cost-cutting measures, such as reducing perks and benefits. Within the organization, talk had recently shifted to “the flattening,” in reference to Zuckerberg’s proposal to eliminate the layers of management in his organization.
The concept of cost-cutting is relatively new for Facebook, which has experienced tremendous growth since its founding nearly 20 years ago. Investors have started to lose patience with the enormous cost of Zuckerberg’s metaverse, and Apple’s introduction of its iOS privacy changes had a $10 billion negative impact on the company’s advertising business.
For the first time since 2021 when Facebook announced it was going all in on the metaverse, even changing its name to Meta, Zuckerberg tempered talk of creating the metaverse and associated costs in his message to employees on Tuesday.
During a fourth-quarter earnings call, Zuckerberg stated that 2023 would be Meta’s “year of efficiency” and that he didn’t want the business to be one of “managers managing managers.”
Zuckerberg said that members of Facebook’s hiring team will be informed of their employment status on Wednesday and that other restructuring measures will be implemented by the end of April or the beginning of May.
Since the initial round of layoffs, the company’s stock price has been trending up. Speaking last month during earnings, Zuckerberg expressed his surprise at the cost-cutting benefits of the layoffs as well as the advancement of future products at Facebook. “It’s made information flow through the company better, and it will help us make better products and attract and retain better people,” he said. “That was honestly a little surprising to me — that as we started digging into this, the company felt better to me.”
With the latest round of layoffs, Facebook’s headcount will be more or less where it was two years ago. On Tuesday morning, the company’s stock price increased by more than five percent. Many employees were shocked by the scope of the November layoffs, but this second round has been anticipated internally for some time.