Meta Platforms Inc. is planning large-scale retrenchments this week in what could be the largest in a spate of tech retrenchments after the industry’s rapid growth during the pandemic.
The retrenchments would be the first extensive reductions in the company’s 18-year history. The number of employees expected to lose their jobs could be the largest to date at a major technology corporation.
CEO Mark Zuckerberg recently said that Meta would ‘focus our investments on a small number of high-priority growth areas’.
‘In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organisation than we are today.’
The cuts follow several months of targeted staffing reductions where employees were managed out of jobs, or had their jobs eliminated.
As business shifted online, Meta hired more than 27 000 employees in 2020 and 2021, and a further 15 344 from January to September this year.
Meta’s stock has fallen by more than 70% this year. The company cites deteriorating macroeconomic trends, but investors are concerned by its spending and threats to the company’s core social-media business. Growth has stalled amid stiff competition from TikTok, while Apple Inc.’s requirement that users opt in to the tracking of their devices has reduced the ability to target ads.
In October investment firm Altimeter Capital said that Meta should slash staff and pare back its metaverse ambitions.
Much of Meta’s costs stem from Zuckerberg’s commitment to Reality Labs, producing virtual- and augmented-reality headsets, as well as the creation of the metaverse. Zuckerberg has called the metaverse a ‘constellation of interlocking virtual worlds in which people will eventually work, play, live and shop’.
The effort has cost the company $15 billion since the beginning of last year, but users have reportedly been largely unimpressed.