Facebook parent Meta conducted its biggest-ever layoffs last November, shedding about 11,000 workers. But more jobs, it appears, are about to be axed.
CEO Mark Zuckerberg noted in a Facebook post on Feb. 1, “We closed last year with some difficult layoffs and restructuring some teams. When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end.” During an earnings call that same day, he announced 2023 will be Meta’s “year of efficiency.”
While Meta workers wonder who will be deemed inefficient, the company has delayed finalizing multiple teams’ budgets, according to the Financial Times. Employees who spoke to the British paper on condition of anonymity said morale at the company was low and little work was getting done on some teams as they await abnormally slow budget decisions.
Meta declined to comment when contacted by Fortune.
“Honestly, it’s still a mess,” one employee told the FT. “The year of efficiency is kicking off with a bunch of people getting paid to do nothing.”
Other workers told the paper the next job cuts are expected next month.
Middle managers have reason to be nervous.
'More proactive about cutting projects'
Zuckerberg wrote in his Facebook post, “We’re working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive. As part of this, we're going to be more proactive about cutting projects that aren't performing or may no longer be as crucial, but my main focus is on increasing the efficiency of how we execute our top priorities.”
One of those priorities is the metaverse, a largely unrealized virtual world that has underwhelmed users and could take years to become profitable, if it ever does. The company’s metaverse division, Reality Labs, notched a loss of $13.7 billion for 2022, up from a $10.2 billion loss in 2021.
Investors have tried pressuring Zuckerberg to scale back the metaverse investments, to no avail.
In December, John Carmack, a virtual reality pioneer, left his high-level consulting role at Meta, where he worked on the metaverse. He tweeted on the way out, “I have always been pretty frustrated with how things get done at FB/Meta. Everything necessary for spectacular success is right there, but it doesn't get put together effectively.”
Slow going with the metaverse and three consecutive quarters of year-over-year revenue declines, however, are not stopping stock buybacks at Meta. In its latest earnings statement, Meta said it had increased its share repurchase authorization by $40 billion, noting that last year it bought back about $28 billion.
Many tech companies that over-hired during the pandemic, as demand surged for the services, have conducted large layoffs in recent months, leading to a sense of clashing headlines as the latest U.S. jobs report shows the lowest unemployment in 50 years.
