Meta layoffs loom

Facebook parent Meta has delayed allocating and processing team budgets as it prepares for a fresh round of large-scale layoffs in the coming months.  

Two employees familiar with the situation told the Financial Times that there has been little clarity about budgets or future headcounts in recent weeks, leading to “zero work” getting done as managers are left unable to plan on distributing workloads. 

They added that projects and decisions that usually take days to finalise and sign off are taking over a month in some cases, even in priority areas such as the metaverse and advertising. 

“Honestly, it’s still a mess," the publication quoted an employee as saying. "The year of efficiency is kicking off with a bunch of people getting paid to do nothing."

Meta laid off about 11,000 staff, approximately 13 per cent of its workforce in November following a slump in revenue caused by macroeconomic pressures and mismanagement of budgets. 

Employees told the Financial Times said that the tech giant is looking at a fresh round of job cuts this year, with the company conducting thorough performance reviews of staff from all departments. 

They added that staff have become demotivated and demoralised due to the impending layoffs and the uncertainty they are causing company-wide. 

Zuckerberg’s “Year of Efficiency”

Earlier this month, Meta announced that it predicts its 2023 expenses at between $89 billion and $95 billion, with CEO Mark Zuckerberg dubbing the period a “Year of Efficiency.”

The tech giant has slashed spending as it attempts to keep its finances under control after economic pressures and the decline of the pandemic-era tech boom saw profits plunge.

Wall Street investors voiced their concern for the tech giant’s $10 billion annual investment into the metaverse and bloated headcount as earnings faltered, leading to layoffs. 

Despite November’s staff reduction being the biggest in the firm’s 18-year history, however, employees say Zuckerberg’s “Year of Efficiency” may involve more staff being shown the door. 

“We’re working on flattening our org structure and removing some layers in middle management to make decisions faster,” Zuckerberg said on an earnings call with analysts last week. 

He added that the Whatsapp and Instagram owner would be “more proactive” about cutting low-performing or low-priority projects.

The change will see managers being forced to move to roles whether they do not manage anyone, or leave to company entirely, one employee told Bloomberg, in a process nicknamed “the flattening” internally.

2023: the year of the layoff

Although Meta’s layoffs have been some of the most among high-tech firms, the search giant is not the only Big Tech firm forced to downsize due to economic challenges. 

At the end of last month, Google announced it would be axing 12,000 staff. A week prior, Microsoft announced it would be slashing 10,000 jobs in a bid to shift funds for its ChatGPT investment. 

Twitter, Yahoo and Amazon have also each announced cuts of over 10,000 staff respectively since the end of November last year. 

To read more about Big Tech's recent layoffs, visit our Business Agility Page. 

Many large tech companies over-hired during the pandemic at a pace that was unsustainable long term, forcing them to downsize amid the economic downturn. 

Meta, which was one of the first major tech companies to announce layoffs, saw its revenue increase following its first round of layoffs in November last year.

The social media behemoth’s revenue hit $32.2 billion in the fourth quarter of 2022, a 4 per cent decline from the year prior but still better than predictions from other quarters. 

Whether other tech firms may follow in Meta’s footsteps remains unclear, but as many continue to report huge revenue losses, further rounds of job cuts are to be expected across the tech landscape.