On Tuesday, Mark Zuckerberg, the CEO of Meta Platforms Inc, revealed that the company will be carrying out a second round of mass layoffs, which wil l result in the termination of approximately 10,000 employees. The decision has been made to reduce operational costs and streamline company expenses.
This announcement follows a previous round of layoffs that took place four months ago, which resulted in the termination of 11,000 employees.
In a message to the staff, Mark Zuckerberg said that team size is expected to be reduced by 10000 and hiring will be stopped to 5000 additional roles which are currently open. There is no specific information available as to which departments or segments will get most hit by the latest round of layoffs.
With the layoffs, Meta Platforms is aiming at a major workforce restructuring at a cost of three to five billion dollars costs. Mark Zuckerberg had earlier said that the company is planning to get rid of middle management layers in order to increase the speed of implementing decisions taken by the top management.
Zuckerberg also admitted that several non-performing projects and non-crucial projects will be halted in order to make essential resources available for other important projects.
Year of Efficiency
Mark Zuckerberg has declared 2023 as the “Year of Efficiency” for Meta and its subsidiaries. This initiative aims to improve the firm’s efficiency and reduce operational costs, resulting in a stronger and more agile organization.
According to Zuckerberg, as a technology company, the ultimate output of Meta is the products it builds for people. To achieve this, the company will be restructured by increasing the number of direct reports for each manager.
While Meta Platforms is placing great emphasis on efficiency and strength, it is worth noting that the company is still investing billions of dollars into its realty labs division, which is primarily focused on products like Metaverse.
However, despite its potential, Realty Labs remains a cost center for the company, resulting in significant losses and very little revenue generation. In 2022, the division reported a loss of 13.7 billion dollars, casting a shadow over the financial statements of the multinational information technology company.
Will other companies follow suit?
Following the announcement of a second round of mass layoffs at Meta Platforms Inc, concerns have arisen in the labor market as to whether other technology giants will also implement similar measures.
As per Layoffs Fyi, in 2023 alone, 483 tech companies have laid off over 128,000 employees. In 2022, numerous tech companies worldwide had to lay off thousands of employees due to severe economic conditions and the possibility of an impending recession in 2023.