Meta is not done with its reduction in the workforce as it will do so again as early as next month. This is in addition to the 11,000 employees that were already laid off in November 2022, which accounts for 13% of its global workforce.
Another Round of Layoffs
There are still not many details about the upcoming job cuts within Meta, including how many employees will be removed, or which departments will be affected. Meta is, however, one of the very few companies that are implementing expanded layoffs.
Meta CEO Mark Zuckerberg did say that the company will be a slightly smaller organization by the end of 2023, as mentioned in Engadget. This is similar to the situation of Coinbase where it initially announced 10,000 layoffs only for it to increase to 18,000 job cuts.
It's not that much of a surprise given that Zuckerberg said that Meta is taking additional steps to become a "leaner and more efficient" company by cutting costs, as well as extending its hiring freeze through the first quarter of 2023.
The Meta CEO increased the company's staff due to the surge of e-commerce at the height of the pandemic, where everyone moved online due to certain restrictions. Many, including Zuckerberg, believed that the outsized revenue growth would continue even after the pandemic.
Sadly, it did not. Online commerce went back to trends prior to the pandemic, and the macroeconomic environment has seen a downturn. The revenue has also been affected by ads signal loss and increased competition.
The First Round of Layoffs
The initial layoffs were brought about by Meta's fourth-quarter earnings and how its shares dropped by nearly 20%. There is also the issue of costs and expenses, with its 2022 third quarter seeing a 19% year-over-year increase to $22.1 billion.
Its sales fell by 4%, and the operating income dropped to 46% compared to the previous year. As a last resort, they implemented layoffs. Since not much detail has been given about the second round of layoffs, the situation in severance is still unclear.
In the November 2022 reduction, impacted employees were given 16 of base pay as well as two additional weeks for every year of service. They were also paid for all remaining PTO time, according to a blog from Meta.
The former employees as well as their families have Meta covering their health insurance for six months since the layoffs. The company also provided three months of career support with an external vendor, and early access to unpublished jobs.
Employees on a work visa were given a notice period before they were laid off, as well as visa grace periods. Meta hired immigration specialists to assist with what the employees or their families need at the time of their transition.
Although the company tried to assuage fears of unaffected employees' potential termination by saying that its future is strong, it also stated that the statements are only predictions and may differ due to a variety of factors and uncertainties.
