Meta, the parent company of Instagram and Facebook, is planning to begin layoffs that will affect thousands of workers this week.
According to a report in The Wall Street Journal, the job cuts could come as early as Wednesday and the company has already told employees to cancel non-essential travel from this week.
Citing people with knowledge of the matter, The Wall Street Journal reports that Meta is considering making thousands of employees redundant.
Meta reported more than 87,000 employees at the end of September. The “large-scale” layoffs planned for Meta could be the largest for a major tech company so far this year.
The company declined to confirm the report but a spokesperson pointed to a statement made by Meta’s CEO Mark Zuckerberg last month.
During Meta’s third-quarter earnings call on October 26, Zuckerberg says “In 2023, we’re going to focus our investments on a small number of high-priority growth areas.”
“So that means some teams will grow meaningfully,” he adds. “But most other teams will stay flat or shrink over the next year.”
In September, Meta announced that it was implementing a hiring freeze “for most roles across the company” and will “minimize costs”, as the social media giant battled with slowing advertising revenue growth and users leaving its platforms due to rising competition.
Then, in late October, the company had $80 billion wiped off its market value after it reported another quarter of declining revenues.
Meta’s shares have fallen by almost two-thirds this year amid heightened concern about the company’s prospects. The disappointing outlook for Meta comes as the company contends with a broad slowdown in online advertising spending amid the global economic downturn, increased competition from TikTok, and challenges from Apple’s iOS privacy update that undercut its primary advertising model.
The company’s heavy investment in the metaverse has also raised concerns among analysts and investors. Reality Labs, its metaverse division, made a $3.7 billion loss over the past three months, and there is no end in immediate sight.
In its third-quarter report, Meta said it anticipated that “Reality Labs operating losses in 2023 will grow significantly year-over-year.” Zuckerberg says he is confident that the company’s spending on the metaverse will pay off — but not for another decade.
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