Sections of this topic
In this article, we’ll look at the reasons behind Meta’s recent layoffs affecting employees in technical roles and how the company’s “year of efficiency” initiative is impacting the organization.
Key Takeaways:
- Meta’s latest round of layoffs affects employees in technical roles.
- Approximately 4,000 employees are expected to be laid off in this round.
- These layoffs are part of CEO Mark Zuckerberg’s “year of efficiency” initiative.
- The business is making progress in bouncing back from a decline in sales growth and significant financial setbacks caused by its Reality Labs sector.
- Meta’s stock has risen 82% in the past six months.
The Layoff Wave: Technical Roles Targeted
On Wednesday, Meta commenced the latest round of layoffs, targeting employees in technical roles.
According to a CNBC report, it is not clear how many employees will be affected.
However, Vox reported on Tuesday that the number of layoffs could be around 4,000.
According to posts on LinkedIn, individuals holding various job positions including senior engineering manager, technical program manager, gameplay programmer, user experience researcher, data scientist and content designer have been terminated from their jobs.
A Year of Efficiency: Zuckerberg’s Plan
Meta’s spokesperson, Elana Widmann, pointed to a March 14th post by CEO Mark Zuckerberg announcing the company’s plans to lay off 10,000 more employees.
This comes in addition to the 11,000 employees that were already let go.
In the same post, Zuckerberg revealed that there would be three waves of cuts.
The first wave affected the company’s recruiting organization right after the announcement.
The second wave is targeting the “tech groups” in late April.
Finally, the business groups will face cuts in late May.
Customer support teams have also seen layoffs.
As the company aims to bounce back from a decline in revenue growth and significant losses in its Reality Labs division, Zuckerberg has announced a “year of efficiency” that will involve layoffs.
Reality Labs’ Billions in Losses
Meta has been struggling to maintain revenue growth and cope with significant losses from its Reality Labs division.
Reality Labs is responsible for developing technology for the metaverse, a nascent market with significant potential but also considerable risks.
In the last quarter, Reality Labs reported a $4.28 billion operating loss, bringing the division’s total losses for 2022 to a staggering $13.72 billion.
Meta’s Stock Rises Despite Layoffs
Despite the company’s financial struggles and ongoing layoffs, Meta’s stock has been performing well.
Over the past six months, the company’s stock has risen by 82%.
This is a noteworthy turnaround after a period of decline.
Wall Street has been applauding the company’s downsizing efforts.
Meta’s revenue has been decreasing for three quarters in a row, and experts expect that there will be another decline in sales when the company releases its first-quarter earnings report next week.
The company’s previous guidance called for sales of between $26 billion and $28.5 billion.
If Meta can achieve the upper end of this range, the streak of revenue drops could come to an end.
Conclusion
As Meta continues with its “year of efficiency” initiative, thousands of employees in technical roles are facing layoffs.
The company is striving to recover from declining revenue growth and significant losses in its Reality Labs division.
Although these challenges have led to job losses for many employees, Meta’s stock has experienced a substantial increase in value over the past six months.
