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Facebook parent company Meta slashes 10,000 jobs

Facebook parent Meta is slashing another 10,000 jobs and will not fill 5,000 open positions as the social media pioneer cuts costs.

Company had no further comment, Canadian impact unclear

A screen shows a man gesturing.

Facebook parent Meta is slashing another 10,000 jobs, about as many as the social media company announced late last year in its first round of cuts, as uncertainly about the global economy hits the technology sector particularly hard.

The company announced 11,000 job cuts in November, about 13 per cent of its workforce at the time. In addition to the layoffs, Meta said Tuesday that it would not fill 5,000 open positions.

The company, based in Menlo Park, Calif., said Tuesday it will reduce the size of its recruiting team and make further cuts in its tech groups in late April, followed by its business groups in late May.

"This will be tough, and there's no way around that," CEO Mark Zuckerberg said. "It will mean saying goodbye to talented and passionate colleagues who have been part of our success."

When contacted by CBC News, a representative for Meta said the company had no further comment. It is unclear whether its Canadian operations will be impacted by layoffs.

Zuckerberg pulling back for investors, says analyst

Meta and other tech companies have been hiring aggressively for at least two years but in recent months have begun to let some of those workers go. Hiring in the United States is still strong, but layoffs have hit hard in some sectors.

Early last month, Meta posted falling profits and its third consecutive quarter of declining revenue. On the same day, the company said that it would buy back as much as $40 billion US of its own stock.

Zuckerberg has invested tens of billions of dollars building out its metaverse, its virtual reality concept, and renamed the company Meta, signalling a new focus for Facebook.

A man is pictured with a microphone near his face.

"As I've talked about efficiency this year, I've said that part of our work will involve removing jobs — and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long-term vision," Zuckerberg said.

Dan Ives, managing director of investment firm Wedbush Securities in New York, said Zuckerberg is pulling back on his metaverse strategy during a time when investors want to see cost-cutting.

"They don't want to see companies spending like 1980s rock stars, which is what Meta's ultimately done," Ives said. He said that the shift in priorities is happening throughout the industry.

The "clock struck midnight, not just for Meta, but really for the rest of big tech. And I think that's what we're seeing across the board, as efficiency now is the number one word over growth," he said.

New economic reality for big tech

The biggest tech companies in the U.S. are cutting costs elsewhere, too.

This month, Amazon paused construction on its second headquarters in Virginia following the biggest round of layoffs in the company's history and its shifting plans around remote work.

A worker adds a label to a shipment box in a warehouse.

Global inflation has remained stubborn and its made for more difficult decisions for both households and businesses in the U.S.

Fast-growth companies, including many in the technology sector, are hunkering down for what may be an extended period of adverse economic conditions.

"At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years," Zuckerberg said in a message to employees.

In early trading, Meta shares rose six per cent on Tuesday.

Credit belongs to : www.cbc.ca

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