BENGALURU, India (Reuters) – Meta is planning to begin large-scale layoffs this week that will affect thousands of employees, the Wall Street Journal reported on Sunday citing people familiar with the matter, with an announcement planned for Wednesday.
The company declined to comment on the WSJ news.
Meta, parent company of Facebook and Instagram, in October predicted a weak fourth quarter and significantly higher costs next year. Projections wiped out about $67 billion from the company’s market value, adding to the more than half a trillion dollars in value already lost this year.
Meta deals with global economic downturn, competition from TikTok, changes to privacy mechanism on Apple devices, and concerns about company spending on metaverse technology.
Meta Chief Executive Mark Zuckerberg has said he expects investments in the metaverse to take about a decade to bear fruit. Meanwhile, the company has had to freeze hiring, close projects and reorganize teams to cut costs.
“In 2023, we will focus our investments on a small number of high-priority growth areas. This means that some teams will grow significantly, but most other teams will remain stable or shrink over the next year. We will end 2023 with roughly the same size or even a slightly smaller organization than we are today,” Zuckerberg said on an earnings call in late October.
In June, the social media company had cut plans to hire engineers by at least 30%, with Zuckerberg warning employees to brace for an economic downturn.
Meta shareholder Altimeter Capital Management, in an open letter to Zuckerberg, previously said the company needs to expedite the shedding of staff and investments, adding that Meta has lost investor confidence as it ramped up spending and turned to metaverse.
(By Mrinmay Dey)
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