Meta will cut 10,000 jobs in the second round of layoffs

(Reuters) – Facebook subsidiary Meta Platforms (METAO) said on Tuesday it will 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 slowdown.

Meta shares jumped 6% on the news. The widely expected job cuts are part of a broader restructuring that will also see the company scrap hiring plans for 5,000 jobs, scrap low-priority projects and flatten middle management layers.

“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” CEO Mark Zuckerberg said in a letter to employees.

Fears of an economic downturn caused by rising interest rates have led to a series of mass job cuts across corporate America: from Wall Street banks like Goldman Sachs (GS.N) and Morgan Stanley (MS.N) to big tech companies including Amazon. com (AMZN.O) and Microsoft (MSFT.O).

Meta, which is pouring billions of dollars into building future battlegrounds, has struggled with a post-pandemic dip in ad spending from companies worried about the economic outlook.

In response, Zuckerberg promised to turn 2023 into the “year of efficiency.” With the latest move, Meta expects expenditures in 2023 to be between $86 billion and $92 billion, down from the $89 billion to $95 billion previously.

Zuckerberg said Meta would remove multiple layers of management, require directors to become individual contributors and give them fewer than 10 direct reports, which would make the organization “flatter.”

“We don’t expect the number of employees to grow so quickly. It makes sense to make full use of the capacity of each manager and defragmentation layers as much as possible,” he said.

Meta’s move in November to cut its staff by 11,000 marked the first mass layoffs in its 18-year history. Its number of employees reached 86,482 at the end of 2022, up 20% from last year.

The tech industry has laid off nearly 290,000 workers since the start of 2022, about 40% of them coming this year, according to layoffs tracking website Layoffs.

Additional reporting by Nivedita Balu and Aditya Soni in Bengaluru; Editing by Anil D’Silva

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