Image source: WWD
Meta, Facebook’s parent company, announced plans to begin its first major layoffs and cut its workforce amid a struggling economy.
According to the Wall Street Journal, the company’s move comes as it struggles to deal with declining business and growing fears of a recession.
The layoff is expected to affect thousands of Meta employees.
According to the Journal, the layoffs could begin this week, as shared by anonymous people familiar with the situation.
A September SEC filing also revealed that Meta has more than 87,000 employees working today.
Read also: Meta stocks take a dip as it falls 17%
Meta held a conference call in October to discuss the third-quarter results.
CEO Mark Zuckerberg said he expects the Meta team to end 2023 with the same size or become a smaller organization than today.
While it’s still being determined, the potential cuts could be connected to tighter budgets for advertisers.
Additionally, Apple’s privacy changes on iOS influenced the company’s core business.
Meta reported a decline in Q2 revenue last month, reporting that profits had halved from 2021.
The drop in profits is caused by the billions the company spent to build the metaverse.
The metaverse is what many suggest is the future of the Internet; however, there are probably still years to go before it launches.
The social media giant had a market capitalization of over $1 trillion in 2021 but has since declined.
Today, Meta is worth over $250 billion.
The company’s stocks opened more than 5% higher on Monday morning as news of the company’s job cuts surfaced.
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Meta is one of many companies in the technology sector to rethink its workforce.
Many companies in what was once considered an untouchable industry recently announced job freezes or layoffs.
The decision is a surprise, considering that many companies grew rapidly during the pandemic.
Last week, Lyft announced it would lay off 13% of its employees.
Payment processor Stripe also said it would cut 14% of its workforce.
Additionally, e-commerce giant Amazon has announced that it will stop hiring for corporate positions.
Facebook rival Twitter made heavy cuts last week after Elon Musk bought the social media company.
Twitter’s budget cuts have impacted the government’s AI, marketing and communications, research and policy teams, among many of the departments involved.
According to Bloomberg, Twitter is asking dozens of laid-off employees to return.