"'Profitability Deterioration' Meta Executes Thousands-Scale Layoffs This Week"

[Image source=AP Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Meta Platforms, the parent company of Facebook, is planning to carry out large-scale layoffs this week, according to multiple sources cited by the Wall Street Journal (WSJ) on the 6th (local time). The move is interpreted as a cost-cutting measure following a significant decline in performance and a stock price plunge due to decreased advertising revenue and massive investments in the metaverse.

According to reports, the layoffs at Meta are expected to number in the thousands. As of the end of September, Meta had approximately 87,000 employees. Notifications to affected employees are expected to begin as early as the 9th. Sources said that senior company officials have instructed employees to cancel non-essential business trips scheduled for this week.

Meta significantly expanded its workforce during the pandemic. It hired 27,000 employees in 2020 and 2021, and more than 15,000 employees have joined the company from January to September this year.

The WSJ reported, "The planned layoffs will be the first workforce reduction in Meta's 18-year history." It added that although the scale will be smaller than the 3,700 layoffs at social networking service (SNS) Twitter, which recently cut half of its staff following CEO Elon Musk's acquisition, it will result in more employees leaving the company compared to other major tech firms that have conducted layoffs.

This year, Meta has faced difficulties with declining revenue for the first time ever and a stock price drop exceeding 70%, ranking last among S&P 500 companies. In response, Meta CEO Mark Zuckerberg announced during the Q3 earnings report on the 26th of last month that the company would focus investments on prioritized areas, stating, "This means some teams will see meaningful growth next year, but most other teams will remain the same or shrink," signaling the upcoming layoffs.

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