Facebook parent company Meta is poised to begin another round of job cuts this week, part of a multi-phased downsizing effort that may trickle on for months impacting thousands of workers, according to a person familiar with the matter.
Like many internet platforms that make money from digital advertising, Meta is encountering economic challenges. The company is facing intensifying competition for advertising dollars and users from newer entrants in the social media market such as the short-form video network TikTok. Some digital advertisers have reduced their spending on social media ads because inflation has created too much market instability.Meanwhile, the Menlo Park, Calif.
Zuckerberg has pledged that 2023 will be the “year of efficiency” as the company seeks to trim middle management and speed up its decision-making. “We closed last year with some difficult layoffs and restructuring some teams,” Zuckerberg said last month during a call with investors. “When we did this, I said clearly that this was the beginning of our focus on efficiency and not the end.”In addition to layoffs, Meta is also planning to deflate the company’s hierarchy to reduce the leadership layers between Zuckerberg and interns. Meta’s plans have included pushing some managers into roles without direct reports.
Meta Chief Financial Officer Susan Li said last week at a Morgan Stanley technology conference that the company is continuing to evaluate how it is deploying resources — a process that will probably lead to “tough decisions” to wind down some projects and shift resources away from some teams. She added that the company is also looking at streamlining cross-functional teams and processes, as well as investing in automation to boost efficiency.
But Meta has struggled to grow the audience for virtual reality, in part because the company is still developing the underlying technology and a wider range of applications that would expand its appeal. Meta has said it expects operating losses for Reality Labs, the division working on VR hardware offerings such as the Quest headsets, to grow in 2023.
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