Meta poised to begin laying off thousands of workers this week

The latest layoffs build upon November workforce cut that slashed 11,000 jobs or roughly 13 percent of Meta’s workforce in the first widespread layoffs in the company’s history.

Meta declined to comment.

Meta’s downsizing adds to a chaotic moment for the tech industry, following the stunning collapse of Silicon Valley Bank, the second-largest bank failure in U.S. history, which catered to tech startups. The implosion prompted a three-day saga in which start-up founders warned that they maybe unable to make payroll or be forced to lay people off if their funds were frozen.

Though the crisis was averted by the U.S. government’s late Sunday announcement that it would guarantee the at-risk deposits, the tech sector is still slashing tens of thousands of jobs. Some 1,532 tech companies have laid off 289,613 workers in 2022 and 2023, according to Layoffs.fyi, an online layoff tracker for the tech sector. In addition to Meta, Google and Amazon have also cut their workforces.

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Like many internet platforms that make money from digital advertising, Meta is facing a mounting set of economic challenges. The company is facing intensifying competition for advertising dollars and users from new entrants in the social media market such as the short-form video network TikTok. Some digital advertisers have reduced their spending on social media ads because inflation has created too much instability in the marketplace.

Meanwhile, the Menlo Park, Calif.-based company over-hired during the pandemic as many social media platforms experienced a boom during government-induced lock downs.

Zuckerberg has pledged that 2023 will be the “year of efficiency” as the company seeks to trim middle management and speed up its capabilities to make decisions.

“We closed last year with some difficult layoffs and restructuring some teams,” Zuckerberg said last month during a call with investors. “When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end.”

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In addition to layoffs, Meta is also planning to deflate the company’s hierarchy to reduce the number of layers of leadership between Zuckerberg and interns. Meta’s plans have included pushing some managers into roles without direct reports, thereby reducing the layers of leadership.

Meta Chief Financial Officer Susan Li said last week at a Morgan Stanley technology conference that the company is continuing to evaluate how it is deploying its resources — a process that is likely going to lead to “tough decisions” to wind down some projects and shift resources away from some teams. She added that the company is also looking at streamlining cross-functional teams and processes as well as investing in automation to create more efficiency.

Despite its economic challenges, Meta — which changed its name from Facebook a little over a year ago — is still investing in its big bet to build out immersive digital realms known as the metaverse. Zuckerberg argues people will want to work, shop and socialize through augmented and virtual reality-powered devices, which he believes will become the next great computing platform after mobile phones.

But Meta has struggled to grow the audience for virtual reality, in part because the company is still developing the underlying technology and a wider range of applications that would expand its appeal. Meta has said it expects operating losses for Reality Labs, the division working on its virtual reality hardware offerings such as the Quest headsets, to grow even bigger in 2023.