Facebook parent company Meta Platforms Inc (META.O) is preparing to start large-scale layoffs this week that will hit thousands of employees, the Wall Street Journal reported on Sunday mentioning people with knowledge of the matter, with an announcement expected as early as Wednesday.
Meta would not comment on the WSJ report.
Facebook parent Meta last month predicted a slow holiday quarter and significantly higher costs in 2023 sweeping about $67 billion away from Meta’s stock market value, adding to the more than half a trillion dollars in value already shed in 2022.
The gloomy outlook comes as Meta is struggling with competition from TikTok, dampening global economic growth, privacy changes from Apple (AAPL.O), concerns about massive spending on the metaverse, and the persistent threat of regulation.
Chief Executive Mark Zuckerberg has said he anticipates the metaverse investments to take almost 10 years to pay off. In the meantime, he has had to shutter projects, freeze hiring, and reorganize teams to cut costs.
Zuckerberg said on the last earnings call late last month:
“In 2023, we’re going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”
The social media company had in June suspended plans to hire engineers by at least 30%, with Zuckerberg warning staff to prepare for an economic downturn.
Buy Crypto NowMeta’s shareholder Altimeter Capital Management in an open letter to Mark Zuckerberg had earlier said the company has to streamline by cutting its workforce and capital expenditure, adding that Meta has lost investor confidence as it jacked up spending and pivoted to the metaverse.
Several technology companies, including Twitter Inc, Microsoft Corp (MSFT.O), and Snap Inc (SNAP.N) have laid off employees and cut down hiring in recent months as global economic growth weakens owing to surging inflation, higher interest rates, and an energy crisis in Europe.
