A report claims that within the next several months, Meta wants to reduce expenses by at least 10%
According to people familiar with the company’s intentions, Mark Zuckerberg’s Meta is aiming to reduce costs by at least 10% in the next few months, the Wall Street Journal reported on Wednesday.
The claimed result is a significant increase from Meta’s original prediction of 2% to 4% expense reductions. According to the article, the Facebook parent has already begun pushing away a significant number of employees by rearranging divisions and giving affected staff members a brief window to seek other posts inside Meta. According to the report, the goal of the action is to achieve staffing reductions while preventing the widespread distribution of pink slips. The reductions are anticipated to be a precursor to deeper reductions. In an email answer, Meta reaffirmed its intention to gradually slow down personnel expansion over the upcoming year. As competition increased and recession fears impacted sales of digital ads, the company’s profitability suffered in recent months. In June, Reuters reported that Meta had reduced its ambitions to hire engineers by at least 30% this year as it braced for a severe economic slump. The business, which owns WhatsApp, Instagram, and Facebook, has avoided making any direct layoffs. However, according to the Journal’s unnamed sources familiar with the situation, Meta is driving more employees away from the company by rearranging departments and leaving them little time to find other jobs. According to the research, Meta’s cost-cutting initiatives have become increasingly aggressive. Meta has already stated that it will reduce hiring and reorder its top priorities. The business reported yearly spending will be around $3 billion lower than anticipated during its first-quarter earnings call, lowering an estimated range that had been as high as $95 billion. A request for comment from the Menlo Park, California-based business was not immediately complied with. Investors initially applauded Wednesday’s cost-cutting news. The stock increased by about 1% to reach session highs after falling as much as 1.5% earlier in the day. But as of 1:20 p.m. in New York, it had later reduced the gains and was down 0.1%. Additionally, Meta has scaled back on several long-term hardware initiatives, such as a dual-camera device that would compete with the Apple Watch. To save money, the corporation even postponed giving its summer interns work. Despite the decrease in hiring, Meta said that as of June 30, it had 83,553 full-time employees, up 32% from the previous year. The cost-cutting measures taken by Google and Meta reveal how these ad-based businesses are preparing for a downturn in the economy. How many employees have been impacted by these changes is unknown. Both businesses have previously hinted that they were looking into cost-cutting measures. Dave Arnold, a spokesman for Meta, cited comments made by management on the company’s earnings call in July. The company intended “to steadily curtail personnel growth over the coming year,” according to Meta CEO Mark Zuckerberg at the time. Since the third quarter of last year, Meta has also decreased its projection for expenses. The social media behemoth has been spending a lot of money on virtual and augmented reality as part of its plans to build the metaverse, a more immersive internet where people will be able to socialize, work, and play in virtual spaces. However, the company doesn’t anticipate making money off of these endeavors for many years. Meta employed 83,553 people as of June 30. Google employees were reportedly informed by Alphabet CEO Sundar Pichai in July that the company will restrict hiring for the remainder of the year and encouraged staff to be “more entrepreneurial.” “In certain circumstances, that entails reducing procedures and combining where investments overlap. In some instances, that entails stopping deployment and redeploying personnel to more urgent areas, “In an email, Pichai informed the staff. Alphabet employed 174,014 people full-time as of June 30.
There have been layoffs at other tech companies. The parent firm of the program Snapchat, which allows messages to vanish, announced this month that it will be laying off 20% of its workforce.