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Thursday, July 25, 2024

Meta Initiates 3rd Round of Layoffs as Part of Cost-Saving Plan

Targeting Business Groups

Meta, formerly known as Facebook, has begun its third round of layoffs as part of a multibillion-dollar cost-saving plan. This latest round of cuts specifically targets members of Meta’s business groups. It follows a previous round of layoffs in April that impacted employees in technical roles.

Job Losses and Previous Layoffs

Between the April and May cuts, approximately 10,000 workers will lose their jobs. This comes after the company’s first round of layoffs in November, which affected 11,000 employees. The current layoffs in May are focused on employees in user experience, marketing, recruiting, and engineering roles.

Confirmation and Context

Meta employees affected by the layoffs took to LinkedIn to announce their departures, confirming an earlier report by Reuters. Meta declined to comment directly but referred to CEO Mark Zuckerberg’s earlier post stating that cuts to the company’s business groups would commence in late May. These layoffs are part of Meta’s larger plan to streamline operations and increase agility in response to a challenging economy and a weakened digital advertising market.

Meta’s Year of Efficiency

The layoffs align with Meta’s “Year of Efficiency” initiative, which Zuckerberg highlighted as necessary for the company to become leaner and more nimble. This approach aims to improve business performance and support the company’s long-term vision. In March, Zuckerberg acknowledged that job cuts would be part of this process and emphasized the broader context of Meta’s vision, culture, and operating philosophy.

Financial Performance and Metaverse Investments

Despite the cost-cutting measures, Meta continues to invest heavily in the development of the metaverse, a virtual shared space. The company’s Reality Labs unit, responsible for virtual reality and augmented reality technologies, reported a $3.99 billion operating loss in the first quarter while generating $339 million in sales. Meta’s first-quarter revenue increased by 3% to $27.91 billion compared to the previous year, following three consecutive periods of decline.

Investor Response and Share Performance

Investors have responded positively to Meta’s major cost-cutting efforts, leading to a significant increase in the company’s share price. Meta’s shares have risen by 180% to $246.74 since hitting a low of under $89 in November.

Correction: In a previous version, two figures were misstated. Meta’s shares have risen 180% to $246.74 since hitting a low of under $89 in November.

Lillian Hocker
Lillian Hocker
Lillian Hocker is a seasoned technology journalist and analyst, specializing in the intersection of innovation, entrepreneurship, and digital culture. With over a decade of experience, Lillian has contributed insightful articles to leading tech publications. Her work dives deep into emerging technologies, startup ecosystems, and the impact of digital transformation on industries worldwide. Prior to her career in journalism, she worked as a software engineer at a Silicon Valley startup, giving her firsthand experience of the tech industry's rapid evolution.

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