Is Layoff a Corporate Competitiveness? Meta's Decision to Lay Off 10,000 More Employees Sparks 7% Surge in Stock Price (Comprehensive)

Meta Platforms, the parent company of Facebook, is once again undertaking a large-scale workforce reduction involving around 10,000 employees. This comes just four months after announcing layoffs of approximately 11,000 employees, which accounted for over 10% of its total workforce. Following the news of the second round of restructuring, Meta's stock price surged more than 7%, regaining a market capitalization of $500 billion.

Mark Zuckerberg, Meta's Chief Executive Officer (CEO), announced on the 14th (local time) via a blog post and an email to employees that the company plans to lay off 10,000 employees over the coming months. Specifically, layoffs will begin with the new hire recruitment team, followed by restructuring and layoffs in the technology group by the end of April. Subsequently, layoffs in management-related teams are expected to take place in May.

Alongside this, Meta has decided to halt hiring for approximately 5,000 open positions. The company will reduce new recruitment and discontinue some lower-priority projects.

CEO Zuckerberg explained that this measure is part of efforts to increase efficiency in response to various economic uncertainties such as the end of the low-interest-rate era, soaring geopolitical risks, and big tech regulations. He stated, "At this point, we must prepare for the possibility that these new economic conditions will persist for years. It is a difficult decision, but there was no other way. I hope to quickly reorganize the organization within this year to overcome this period of uncertainty and focus on important work ahead."

[Image source=Reuters Yonhap News]

Among major big tech companies, Meta is the first to announce a second round of restructuring. Previously, Meta had announced a large-scale layoff plan involving 11,000 employees in November last year.

This additional round of layoffs is expected to particularly impact non-engineering parts. The Wall Street Journal (WSJ) reported that among the discontinued projects are some wearable devices being developed by Reality Labs, which is responsible for Meta’s metaverse construction mission. Meta has recently invested billions of dollars in virtual reality and augmented reality technologies to accelerate its metaverse business. Reality Labs recorded a loss of $13.7 billion last year.

In the United States, as recession warnings grow louder, restructuring efforts such as layoffs have been continuing mainly among tech companies since the second half of last year. WSJ cited Layoffs.fyi, which tracks layoffs at global tech companies, reporting that since 2022, about 300,000 tech workers have been laid off. Microsoft, the third-largest company by market capitalization, decided to lay off 10,000 employees, equivalent to 5% of its total workforce, earlier this year. Google Alphabet also carried out its largest layoffs in company history, cutting 12,000 jobs. Amazon, Salesforce, Dell, and others have also conducted large-scale restructuring.

Following the news of additional restructuring, Meta’s stock price closed up 7.25% compared to the previous session on the New York Stock Exchange that day. Based on the closing price, its market capitalization also recovered to the $500 billion level. According to Dow Jones Market Data, this is the first time since June last year that Meta’s market cap has returned to the $500 billion range. However, it still falls far short of the $1 trillion market cap recorded in September 2021.

This content was produced with the assistance of AI translation services.