MENLO PARK, California: As the tech industry prepares for a major economic downturn, Facebook-parent company Meta Platforms has announced that it would cut 10,000 jobs this year, making it the first Big Tech company to plan on a second round of mass firings.
Under the proposed cuts, the company will cancel plans to hire 5,000 new staff, shelve lower-priority projects and "flatten" layers of middle management.
The first rounds of mass layoff in autumn saw the company lay off more than 13 percent of its workforce, or 11,000 employees.
Data from tracking site Layoffs.fyi. showed that over the past few months, a forecasted economic downturn due to rising interest rates has caused a series of mass firings in the US, with tech companies leading the way, laying off more than 290,000 workers since the start of 2022.
As well as facing threats to its core digital ads business, Meta is also spending considerably on Chief Executive Mark Zuckerberg's plans to build the "Metaverse."
This week, Zuckerberg told staff that most of the new cuts would be announced in the next two months.
"For most of our history, we saw rapid revenue growth year after year, and had the resources to invest in many new products. But last year was a humbling wake-up call. I think we should prepare ourselves for the possibility that this new economic reality will continue for many years," he said.
Susannah Streeter, Hargreaves Lansdown analyst, noted, "The latest downsizing indicates how desperate the company is to get costs under control as its revenues have fallen amid declining marketing budgets," as reported by Reuters.
"Virtual reality is an expensive business to be in, so while Meta maps out a path through an uncertain landscape, it needs to find efficiencies elsewhere," she added.
With the latest cuts, Meta expects its 2023 expenses to be between $86 billion and $92 billion, lower than the $89 billion to $95 billion previously forecast.