NewsUC&C15 Mar 2023 · 4 min read

Meta to Make 10,000 More Job Cuts in "New Economic Reality"

Meta will cut 10,000 more jobs and 5,000 open roles as it pivots to AI, metaverse and Buck2 amid a new economic reality. Published on UC Today.

Jonny Wills

Meta, the parent company of Instagram, WhatsApp and Facebook and home to the much-touted Web3 metaverse concept, is to cut 10,000 more jobs.

The redundancies come after it announced it would let go of 11,000 staff in November, just under 13 percent of its then workforce.

The layoffs represent another cut of around 13 percent of its workers. The tech firm is also to cease its search for new employees.

In a nearly 2000-word statement to the company headed Update on Meta’s Year of Efficiency Mark Zuckerberg, CEO Facebook, said:

"Overall, we expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired."

He continued: "This will be tough, and there’s no way around that. It will mean saying goodbye to talented and passionate colleagues who have been part of our success.

"They’ve dedicated themselves to our mission, and I’m grateful for all their efforts. We will support people in the same ways as before and treat everyone with the gratitude they deserve."

Zuckerberg remained optimistic and spoke about the restructuring and development plans; he remarked: "After restructuring, we plan to lift hiring and transfer freezes in each group. Other relevant efficiency timelines include targeting this summer to complete our analysis from our hybrid work year of learning so we can further refine our distributed work model.

"We also aim to have a steady stream of developer productivity enhancements and process improvements throughout the year."

Metaverse Interest Slowing

Interest in the metaverse roadmap has been waning, possibly due to scandals around the FTX cryptocurrency exchange collapse affecting the reputation of the so-called 'Web3'. The explosion of interest in the instantaneous search capability of ChatGPT hasn't helped, with firms diverted by the attraction of heightened productivity in a time of cost saving during the global downturn.

Reality Labs, the metaverse division of Meta, lost $3.7 billion in the final quarter of 2022. Since then, Google Trends recently reported an 80 percent drop in searches for metaverse terms.

Some in the UC&C space have questioned if they will prepare for a virtual world when firms this year — including Meta — are looking to consolidate when already face-to-face in Teams or Zoom collaborating.

In UC Today's UC Predictions for 2023, Blair Pleasant, President and Principal Analyst, COMMfusion predicted that the take-up for the metaverse would be less this year; she commented: "I don't think we'll be seeing more than a small handful of vendor offerings and trials.

"Some people or organisations may try things like you using avatars, but I don't think we'll see many real business uses of what people call the metaverse. Instead, we're going to hear about road maps and direction but not much more."

Regardless of a drop in interest, Zuckerberg stated:

"Our leading work building the metaverse and shaping the next generation of computing platforms also remains central to defining the future of social connection."

Buck2 and Meta's Long-Term Plans

In terms of other further long-term development, Zuckerberg hinted at the company's AI involvement: "We’re focused on the long term. That means investing in tools that will make us most effective over many years, not just this year — whether building AI tools to help engineers write better code faster, enabling us to automate workloads over time, or identifying obsolete processes we can phase out."

He referred to Buck2, Meta's super-quick development system: "Our developer tooling work is underway and seeing good results. For example, Buck2 is our new open-source build system that compiles builds around 50 percent faster so engineers can spend more time iterating and less time waiting. Our analysis found that engineers whose builds were sped up by Buck2 often produced meaningfully more code."

Zuckerberg spoke about a new economic reality and the action Meta took; and stated: "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. The world economy changed, competitive pressures grew, and our growth slowed considerably.

"We scaled back budgets, shrunk our real estate footprint, and made the difficult decision to lay off 13 percent of our workforce.

"At this point, we should prepare ourselves for the possibility that this new economic reality will continue for many years."

Staff Cuts and Fears of Crash Since SVB Crisis

The recession itself has forced many firms to enact 'restructuring' plans, including the following reported approximate numbers of layoffs since the global downturn began:

Cisco: 6,600
Salesforce: 8,000
Google: 10,000
Zoom: 1,300
Microsoft: 11,000
Snap: 1,300
Twitter: 3,750
Amazon: 18,000
TalkDesk: 400
Twilio: 1,700

Fears have escalated since the collapse and acquisition by HSBC of SVB UK, which sent shockwaves across other banks and the global economy. A slow-rolling financial crisis is being reported, with Tesla CEO Elon Musk likening the Silicon Valley Bank crisis to the start of the 1929 Wall Street Crash. In a response to Cathie Wood, CEO of Ark Invest, he tweeted: "Lot of current year similarities to 1929."