Meta Platforms Inc. will try to cut costs by about 10% over the next few months, which will mean a bit of an upheaval at the company, the Wall Street Journal reported today.
People familiar with the situation told the Journal that instead of directly laying off people, the route taken was to shuffle various departments but give workers a short window of time to find a new position, effectively pushing them out. The report says that these employees are given very little time to secure a new position.
It’s not unusual for a company to initiate such a shuffle, and in general, since Meta usually hires pretty smart staff, people would usually be able to find new positions. The person familiar with the matter said that’s not happening this time, saying that “employees with good reputations and strong job reviews get pushed out on a regular basis.”
The company, while always at the center of controversy, has recently been hit where it hurts. When Meta reported its second-quarter results earlier this year, the outlook didn’t look very good. Earnings per share were significantly lower than the same time last year and reported a decline in revenue for the first time.
Meta blamed the poor results on the economic slowdown, which led to “a continuation of the weak ad demand environment we experienced in the second quarter.” CEO Mark Zuckerberg said in July that the company would shed some of its staff over the next year, saying Meta would “do more with fewer resources.” With a reported 22% increase in costs and expenses over the year estimated at around $20.4 billion, it’s no surprise that the company is fine-tuning its payroll.
In July, chief product officer Chris Cox said as much in a memo to staff, when he told employees these were “serious times.” He added: “We need to work flawlessly in a slower growth environment where teams don’t have to expect a huge influx of new engineers and budgets.”
At the same time, Meta had to reinvent itself as it watched the rise in popularity of apps like TikTok. However, the Meta has some tricks up its long sleeves. The company hasn’t exactly put all its eggs in one basket, but it’s certainly investing heavily in what it believes will be the future of social technology: the metaverse. The company is currently working hard and spending a lot to ensure that widespread augmented and virtual reality becomes a reality.