CEO of Meta, Mark Zuckerberg, announced in a memo today that the company will lay off 10,000 workers and will close around 5,000 additional open roles they haven’t hired yet.
This decision is part of Zuckerberg’s “Year of Efficiency” to reduce costs amid a slowdown in digital sales. Meta also announced in an SEC filing that it anticipated lower total expenses in 2023, ranging from $86 billion to $92 billion.
Today’s news comes just three months after the previous round of layoffs of 11,000 employees in November which is about 13% of Meta’s overall staff.
Meta had over 87,000 employees before the layoffs in November, and after this second round of layoffs, the company will be down to around 66,000 employees.
“Here’s the timeline you should expect: over the next couple of months, org leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates,” Zuckerberg said in his memo posted on Tuesday.
In his memo, Zuckerberg specifies that Meta’s recruiting team will learn if they will be laid off by tomorrow, but tech team members won’t know until April. Business group employees won’t find out until May, and some employees won’t be told until the end of the year.
He adds that the company should prepare for “the possibility that this new economic reality will continue for many years” as a nod to the country’s economic uncertainty.
“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,” Zuckerberg’s message said.
Meta, much like other tech giants, has been stung by declines in digital ad spending and Apple’s privacy changes. During the pandemic, the company staffed up heavily to meet the increased demand of consumers stuck inside due to COVID-19 restrictions.
As restrictions ended and consumers went back to their normal lives, tech companies found themselves with too many workers. Jeffries analyst Brent Thill told CNBC that the latest round of layoffs is necessary and that companies can “effectively do more with less.”
In a Jeffries equity research note this month, analysts wrote: “We believe more headcount reductions are needed to offset the last 2 years of excess hiring.”
As part of the “Year of Efficiency,” Zuckerberg said that the company would focus on returning to a more optimal ratio of engineers to other roles. A Wall Street Journal report said that the “new rounds of layoffs are likely to hit non-engineering roles especially hard.”
Zuckerberg said in his memo that the layoffs would be tough and that he is personally grateful to all the employees.
“They’ve dedicated themselves to our mission,” he said.
Zuckerberg concluded his memo by saying that change is not easy and encouraged all employees to focus “on what you can control.” Meta is not the only major company announcing significant layoffs. In January, Amazon announced layoffs impacting 18,000 of their employees. Google announced plans to cut 12,000 workers, Microsoft revealed plans to lay off 10,000 employees and Salesforce all announced layoffs to cut 7,000 jobs.