Meta Platforms Inc. is reportedly planning more layoffs in March as part of an efficiency drive after having laid off around 11,000 employees in November.
The Financial Times, referencing employees familiar with the situation, Saturday reported that Meta has delayed finalizing multiple teams’ budgets ahead of the planned cuts. The delays are claimed to have resulted in a “mess,” with a lack of clarity resulting in “zero work” being done as managers have been unable to plan future workloads.
The Meta insiders claim that projects and decisions that previously have taken days to sign off are now taking months, including in high-priority areas such as metaverse and advertising. Consequently, employees at Meta are said to be demotivated and demoralized due to ongoing uncertainty.
In an investor call following its earnings report on Feb. 1, Cheif Executive Officer Mark Zuckerberg (pictured) said Meta was “going to be more proactive about cutting projects that aren’t performing or may no longer be as crucial” and his main focus “is on increasing the efficiency of how we execute our top priorities.”
Dubbing 2023 the “year of efficiency,” Zuckerberg also said on the call that “next, we’re working on flattening our org structure and removing some layers in middle management to make decisions faster.” Given Zuckerberg’s words, the idea that Meta is preparing for further significant job cuts is no surprise. Just how big the next round of layoffs will be is unknown, however.
Ahead of the initial round of layoffs in November, Zuckerberg reportedly told executives that he had been too ambitious about how he expected the company to grow and had hired way too many staff. Coming into the first round of layoffs, Meta had two quarters of disappointing earnings reports. Combined with activist shareholders calling for cuts, it was clear that Meta had to do something to avoid the macroeconomic iceberg it was heading toward.
Come the earnings report on Feb. 1 and, even though the layoffs were still fresh, Meta surprised investors with its outlook.
Although its earnings per share were down in its fiscal fourth quarter because of restructuring charges of $4.2 billion, the company also forecast operating expenses of $89 billion to $95 billion in fiscal 2023, down from its previous guidance of $94 billion to $100 billion. Capital expenditures were also forecast to drop to $30 billion to $33 billion, down from a previously forecast $34 billion to $37 billion. Added to the mix was a $40 billion share repurchase program, another popular move with investors.
After dropping below $100 per share in November, Meta stock has nearly doubled in price since announcing the cost-cutting. With Zuckerberg still under pressure — Meta stock is still down by over half its peak in September 2021 — further cost-cutting, including layoffs, would appear to be a given at this point as Meta strives to increase its share price and please investors.