March 14 (Reuters) – Facebook parent Meta Platforms ( META.O ) said on Tuesday it would cut 10,000 jobs, the first Big Tech company to announce a second round of mass layoffs as the industry prepares for a deep economic downturn.
Meta shares rose 6% on the news. The long-awaited job cuts are part of a broader restructuring that will also see the company scrap hiring plans for 5,000 openings, cancel lower-priority projects and smooth layers of middle management.
“I think we need to prepare for the possibility that this new economic reality will continue for many years,” CEO Mark Zuckerberg said in a message to staff.
Concerns about an economic slowdown due to rising interest rates have triggered a series of mass layoffs across U.S. companies: from Wall Street banks such as Goldman Sachs ( GS.N ) and Morgan Stanley ( MS.N ) to Big Tech companies including Amazon . com (AMZN.O) and Microsoft (MSFT.O).
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Meta, which is pouring billions of dollars into building the futuristic metaverse, has struggled with a post-pandemic decline in ad spending from companies worried about the economic outlook.
In response, Zuckerberg has promised to make 2023 the “Year of Efficiency.” With the latest move, Meta expects spending in 2023 to come in between $86 billion and $92 billion, down from the $89 billion to $95 billion forecast previously.
Zuckerberg said Meta will remove multiple layers of management, ask managers to become individual contributors and give them fewer than 10 direct reports, which in turn would make the organization “flatter.”
“We don’t expect to increase the number of employees so quickly, it makes more sense to fully utilize the capabilities of each manager and defragment layers as much as possible,” he said.
Meta’s move in November to cut its workforce by 11,000 marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at the end of 2022, up 20% from a year ago.
The tech industry has laid off nearly 290,000 workers since the start of 2022, with about 40% coming this year, according to layoff-tracking site layoffs.fyi.
Reporting by Nivedita Balu and Aditya Soni in Bengaluru; Editing by Anil D’Silva
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