Facebook’s parent Meta plans to lay off 10,000 people in an effort to become more efficient, chairman and CEO Mark Zuckerberg announced in a blog post to employees.
The post, circulated Tuesday, is an update on plans for a year aimed at improving efficiency at Meta. The layoffs are meant to make Meta a better technology company and improve the company’s finances.
Meta would not say how many of its employees in the Bay Area would be laid off.
Last year, net income at Meta fell 41 percent as costs and expenses grew 23 percent. Revenue was down 1 percent. Meta reduced its workforce by 13 percent in 2022.
“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products,” Zuckerberg said in the post. “But last year was a humbling wake-up call. The world economy changed, competitive pressures grew, and our growth slowed considerably.”
“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. But last year was a humbling wake-up call. …”
Mark Zuckerberg, Meta CEO
Layoffs were expected to begin as soon as Wednesday. Zuckerberg said he will tell members of the recruiting team who from their team will be laid off. Restructuring and layoffs in the company’s tech group are expected in late April and in late May layoffs in the business groups are expected, Zuckerberg said.
“In a small number of cases, it may take through the end of the year to complete these changes,” Zuckerberg added. “Our timelines for international teams will also look different, and local leaders will follow up with more details.”
Meta also plans to close about 5,000 roles for which it hasn’t yet hired.
Following interest rate increases by the U.S. Federal Reserve Bank, fears of a U.S. recession have risen.
Matthew Holian, an economist at San Jose State University, said forecasts indicate the U.S. may soon suffer a mild and short-lived recession.
The Fed has been raising interest rates to slow economic growth because that growth has been fueling inflation.
“You can’t fight inflation without putting economic growth at risk,” Holian said.
Misery loves companies
Companies besides Meta have announced layoffs as well.
Google’s parent company Alphabet announced in January layoffs of about 12,000. Microsoft in the same month announced layoffs of 10,000 and San Francisco-based Salesforce started cutting its workforce by 10 percent in January.
Salesforce chair and CEO Marc Benioff said in a Jan. 4 letter to employees that even though the company has never been more critical to its customers, “The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions.”
In California, 195,000 people were laid off or fired in December, according to preliminary data and the latest for the state from the U.S. Bureau of Labor Statistics.
In the West, layoffs and firings in January amounted to 476,000 people, according to preliminary BLS data. Nationwide the number was 2,298,000.
In the technology sector, 60,000 people nationwide were laid off or fired in January, preliminary BLS data show.
Despite the layoffs, “the labor market remains strong with the unemployment rate declining to 3.4 percent in January, the lowest level since May 1969,” said Thuy Lan Nguyen, senior economist at Federal Reserve Bank of San Francisco in a March 9 research note.
Still, Nguyen said, “The U.S. Economy has shown some signs of cooling.” Nguyen said real gross domestic product, a measure of overall growth in the economy, fell to a 2.7 percent annual rate in the fourth quarter, down from 3.2 percent in the previous quarter. The manufacturing sector has been contracting, too.