Facebook’s parent company Meta is said to be planning the first mass layoffs in its history as the company grapples with a shrinking business and fears of a looming recession.
The layoffs are expected to affect thousands of workers and could begin as early as this week, The Wall Street Journal reported over the weekend, citing unnamed people familiar with the matter. Meta employs more than 87,000 people, according to a September filing with the U.S. Securities and Exchange Commission.
Meta declined to comment on the report.
Discussing its third-quarter earnings results on a conference call last month, CEO Mark Zuckerberg said he expects the company to end 2023 “about the same size, if not slightly, as we are now. small organization”.
Potential cuts from tighter advertiser budgets and Apple’s iOS privacy changes have weighed on Meta’s core business. The company last month reported a revenue drop for the second quarter and reported that its profit halved from the previous year. The drop in profitability is largely due to Meta spending billions of dollars to build a future version of the internet, called Metaverse, that may still be years away.
Meta’s market cap was over $1 trillion last year and is now around $250 billion. (Shares of Meta opened more than 5% higher on Monday morning following reports of layoffs. )
Meta isn’t the only tech company said to be rethinking staffing. It’s an astonishing shift for an industry sometimes considered untouchable, In recent months, many tech companies have announced hiring freezes or layoffs, often after experiencing rapid growth during the pandemic.
Last week, ride-sharing company Lyft said it would cut 13% of its workforce, and payment processing company Stripe said it would cut 14% of its workforce. On the same day, e-commerce giant Amazon said it was suspending corporate hiring.
Facebook’s rival Twitter on Friday made sweeping layoffs at the company under its new owner, Elon Musk. The layoffs affected its ethical AI, marketing and communications, search and public policy teams, and other divisions.
In the days since, Twitter (TWTR) has reportedly asked dozens of laid-off employees to return to work, according to Bloomberg.