Technology giant, Meta is reportedly planning to begin large-scale layoffs this week following several months of targeted staffing reductions. As per the report, it could be one of the largest rounds of job cuts in a series of layoffs that rocked the tech industry.
According to a Wall Street Journal (WSJ) report, the planned layoffs would be the first mass head-count reductions to occur in Meta’s 18-year history. Amid rising costs and a recent collapse of its share price, Meta is resorting to several tactics to reduce its futile expenses. The company’s expenses have skyrocketed, causing its free cash flow to decline 98% in the most recent quarter. Many employees saw their jobs eliminated. The WSJ report also stated that company officials have asked employees to cancel nonessential travel beginning this week.
One of the Biggest Layoff in Tech Industry
As per the report, an official announcement regarding the large scale layoff could come in as soon as Wednesday. The move is expected to affect thousands of employees across Meta’s 87,000-strong workforce. A spokesman for Meta declined to comment noting the company would “focus on a small number of high priority growth areas.” The news comes on the heels aft WSJ reported in September that Meta was planning to cut expenses at least 10% in the coming months.
Last month, Meta CEO Mark Zuckerberg noted that since the macroeconomic conditions are still choppy, the company is planning to allocate its budget more “conservatively.” He highlighted that some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. Earlier in June, Zuckerberg told employees at a companywide meeting,
“Realistically, there are probably a bunch of people at the company who shouldn’t be here.”
Tech and Crypto Industry Grapple Under Pressure
Another factor that has affected Meta seems to be its stock that has fallen over 70% this year. In October, investment firm Altimeter Capital noted in a letter to Zuckerberg that Meta should slash staff as well as curb its metaverse ambitions in a rising discontent among shareholders.
2022 has been a rough year for tech companies along with the crypto market. Several prominent organizations bore the brunt of rising inflation, consecutive interest rate hikes and geopolitical tensions. Celsius Network, one of the biggest crypto lenders succumbed to the financial turmoil, filing for a bankruptcy. The recent crypto crash has plundered the fortunes of several crypto companies.