Meta Begins Third Round of Layoffs to Cut Costs

Meta’s cost-cutting plan has entered its third round of layoffs, with the latest round affecting employees in the company’s business groups. This follows a previous round of layoffs in April that affected technical roles. Between the two rounds, about 10,000 workers will lose their jobs, in addition to the 11,000 employees who were laid off in November 2021.

Reason for Layoffs

Meta, formerly known as Facebook, is undergoing a “year of efficiency” to slim down and become more agile in the face of a challenging economy and weakened digital advertising market. CEO Mark Zuckerberg stated that removing jobs is in service of building a leaner, more technical company and improving business performance to enable the company’s long-term vision. Investors have lauded the cost-cutting measures, sending Meta’s shares soaring 180% to $246.74 since their low point of under $89 in November.

Despite the cost cuts, Meta is still investing heavily in the development of virtual reality and augmented reality technologies through its Reality Labs unit, which generated $339 million in sales but logged a $3.99 billion operating loss in the first quarter.

The layoffs have been confirmed by Meta employees on LinkedIn, with those in user experience, marketing, recruiting and engineering roles among those affected. Meta declined to comment but referred to Zuckerberg’s earlier statement that cuts to the company’s business groups would begin in late May.

The company’s first-quarter revenue rose 3% from a year earlier, after three consecutive periods of decline. However, the company is still facing a challenging digital advertising market, which has led to the cost-cutting measures.

Meta’s cost-cutting measures are aimed at building a leaner, more agile company amid a challenging economy and weakened digital advertising market. The company is investing heavily in the development of virtual and augmented reality technologies, despite the losses incurred by its Reality Labs unit. The layoffs have affected employees in both technical and business roles, with 10,000 jobs set to be lost between the April and May cuts. Investors have praised the cost-cutting measures, resulting in significant gains in Meta’s share price.