Its announcement means that it has become the first Big Tech company to unveil a second round of mass layoffs in response to increasingly tough economic conditions. To date the company has already laid off 13 per cent of its workforce, around 11,000 people.
The markets have responded positively to the announcement as the company looks to restructure, and it is also planning to scrap hiring plans for up to 5,000 positions.
The scale of the job losses is immense and comes after a hiring spree that saw the company double its head count from 2020 as it responded to the tech boom triggered by the covid crisis.
It’s not on its own. According to employment tracking sites tech companies have shed upwards of 300,000 jobs since the beginning of 2022.
However, Meta's purge of employees has been one of the sector's largest.
The company’s core digital ads business has been struggling while it has been investing heavily in the metaverse.
According to Mark Zuckerberg, the company’s CEO, Meta is having to adjust to a ‘new economic reality’ and further restructuring of the business is expected, however, investors have been concerned at the company’s decision to pour billions of dollars into its metaverse-oriented Reality Labs unit - that business lost almost $14 billion in 2022 – while also investing heavily in infrastructure to support its artificial intelligence usage.
The metaverse is proving to be extremely expensive to deliver and these latest cuts suggest that the company is desperate to get its costs under control.
