Meta, the company that owns Facebook, Instagram and WhatsApp, will begin large-scale layoffs this week, The Wall Street Journal reported. The cut will affect thousands of employees and is scheduled to be announced next Wednesday.
Those responsible for the company, which has more than 87,000 employees, have already asked them to cancel non-essential trips starting this week.
If materialized, it will be the first significant workforce reduction in the company’s 18-year history.
And while the percentage is less than last week’s Twitter cuts, which affected half of its staff, the number of Meta employees expected to lose their jobs could be the largest to date in a big technology company.
Grow too much and then fire
Days ago, the company’s CEO Mark Zuckerberg had already announced that it would “focus investments on a small number of high-priority growth areas.”
“So that means some teams will grow significantly, but most other teams will be flat or shrink over the next year,” he said Oct. 26. “As a whole, we hope to end 2023 with the same size, or even with a slightly smaller organization than today,” Zuckerberg deepened.
Meta’s shares have fallen more than 70% this year. The company has highlighted deteriorating macroeconomic trends, but investors have also been spooked by its high spending and threats to the company’s core social media business.
Meta’s expenses have also risen sharply, causing its free cash flow to drop 98% in the last quarter.
Some of the company’s expenses are due to heavy investments in additional computing power and artificial intelligence required to further develop Reels, Meta’s TikTok-like short-form video platform on Instagram, and to target ads with less data.
However, the WSJ details, much of Meta’s rising costs are due to Zuckerberg’s commitment to Reality Labs, a division of the company responsible for virtual and augmented reality headsets, as well as the creation of the metaverse.