Social networking behemoth Meta is reportedly axing approximately 15% of its workforce. Business Insider reported that the company is carrying out “quiet layoffs†of underperformers just a couple of weeks after sources told the Wall Street Journal that the Facebook parent is looking to cut operating costs by 10%.
Meta disclosed it had 83,533 employees in its Q2 earnings report. 15% of this would mean approximately 12,000 Meta employees could be shown the door as concerns over economic woes mount.
Meta’s plan to reduce 10% of operating expenses equates to $2.046 billion in absolute terms. The bulk of opex savings is expected to come from headcount reduction though other overheads and consulting budgets may also face cuts.
The company has also instituted a hiring freeze since July 2022. At the time, Meta, which owns Instagram, WhatsApp, Oculus and other properties besides Facebook and is currently building the Metaverse, signaled employees to expect “leaner†teams.
Due to a bleak macroeconomic outlook and privacy upgrades in devices, dwindling ad revenue and rising OpEx have contributed to the falling profitability of one of the most valuable companies globally. Meta’s market capitalization has declined from over $1 trillion in September 2021 to $373.76 billion todayOpens a new window . Year-to-date, Meta’s stock has slumped by 58.92%.
See More: Meta Partners With Qualcomm To Develop Customized Chips for the Metaverse
Sources at Meta told Business Insider that managers were asked to shortlist 15% of their teams who “need support,†which is the list of employees who haven’t performed at par with the company’s expectations. These employees are reportedly being put on a “performance improvement plan,†or PIP, which is considered ominous internally.
In other words, Meta could put approximately 12,000 employees on the proverbial ventilator, giving them 30 days to find something else within Meta. Failure to land something within this time would effectively terminate their association with the company.
According to Crunchbase News, venture capital funding in Q3 2022 was at $81 billionOpens a new window , declining by 53% year-over-year and by 33% quarter-over-quarter.
The heat is also evident from real estate brokerage CBRE’s findings that Q3 2022 was one of the slowest quarters in recent memory, with a record high vacancy of 25.5% carrying out “quiet layoffs†of underperformers, the San Francisco Chronicle reported.
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