Meta Platforms Inc (NASDAQ:FB) announced plans Tuesday to lay off another 10,000 employees and leave 5,000 positions unfilled as part of CEO Mark Zuckerburg’s so-called “Year of Efficiency.”
To hear him tell it, "leaner is better," the CEO said in a statement on Facebook.
"Since we reduced our workforce last year, one surprising result is that many things have gone faster. In retrospect, I underestimated the indirect costs of lower priority projects," Zuckerburg said. "...In our year of efficiency, we are focused on canceling projects that are duplicative or lower priority and making every organization as lean as possible."
The company cut 11,000 jobs back in November, which sent shares higher. Investors have taken this round of layoffs similarly in stride, as shares of Mets climbed over 7% Tuesday.
"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years," Zuckerberg said. "Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation. Given this outlook, we'll need to operate more efficiently than our previous headcount reduction to ensure success."
What Zuckerburg left unsaid is that Meta hugely upped its spending during the pandemic, related to its Metaverse development and staffing. From the fourth quarter of 2019 to the third quarter of 2022, Meta’s headcount nearly doubled. Meanwhile, Meta's Reality Labs segment lost $13.7 billion in 2022 after losing another $10.1 billion in 2021.
Once this second round of layoffs takes effect, the company will be down to about 65,000 employees. For those that remain, Zuckerburg also emphasized the importance of in-person work.
"Our early analysis of performance data suggests that engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely," he said. "This analysis also shows that engineers earlier in their career perform better on average when they work in-person with teammates at least three days a week."
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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