Meta, Facebook's parent company, might announce its plans for significant job cuts that will affect thousands of members of its workforce this week.
The company is allegedly laying off employees as early as Wednesday in what could go down as the biggest workforce reduction by a tech company in 2022, Engadget writes.
The Employee Reductions Are Part Of Meta's Cost-Cutting Efforts
In a Q3 earnings call, CEO Mark Zuckerberg said that the social media company is focusing on its investments in 2023.
This investment will happen in high-priority areas of the company where there needs to be team growth, which means cutting jobs in some areas is necessary.
CNet claims that firing employees will be necessary for the company and its goal to minimize its costs by at least 10% within the next few months.
Reining in on costs is part of Meta's response to the massive spending the company had to do after the tech industry boom during the pandemic.
It was also at the height of the COVID-19 outbreak that Facebook's parent grew significantly in workforce size, acquiring above 27,000 employees in 2020 and 2021.
According to Engadget, this hiring spree continued until the third quarter of 2022 with an additional 15,344 employees, leaving Meta with around 87,000 staff as of the moment.
Due to rising competition from TikTok and the release of Apple's App Tracking feature, the company reported its first-ever revenue drop.
Because of this, 73% of the company's stock had been shed since the start of 2022, making layoffs a band-aid solution to address the problem.
It did not help that Zuckerberg has in so far failed to establish new revenue opportunities for Meta, like spending $15 billion on VR and AR technologies, which only had little success.
CNet reports that this makes Meta the latest tech giant to have initiated layoffs after the tech industry inflation, which hurt the companies after the brief industry growth in 2020.
Read More: Meta Reportedly Freezes Hiring of New Employees - Are Layoffs Happening Too?
Investors Worry About Meta's Status In 2022
It has been a consistent struggle for the social media company throughout 2022, and many investors are expressing their concerns about Meta's state.
Jim Cramer, one of the company's investors, expressed his regret about trusting Meta's management last month after the company experienced another difficult quarter.
The disappointment in the investor came after Meta was fined almost $25 million for its violation of campaign finance disclosure laws by a Washington State judge, Fortune reports.
In August, its CEO recounted on a podcast with Joe Rogan how it felt to lead a company that suffers continuous blows as of recent times.
With the company still having difficulties regrouping, Meta's employees can not deny that they saw the workforce reduction coming from afar.
According to Fortune, executives asked staff to cancel all nonessential travel as Zuckerberg told workers at a company-wide meeting that some of them should not even be with Meta.
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