Meta, like many others, have been hit by the global pandemic that pushed many world economies backward. For instance, the United States GDP fell by 8.9%, and even the country’s imports exceeded its exports as demand from firms and consumers heightened. Currently, the country is battling inflation and sluggish economic activity.
According to a report from OECD, the growth in the economy dropped by about 1.5% in 2022, and in 2023, it recorded around a 0.5% reduction. While the decline may be negligible, the ongoing economic crisis has affected the operations of specific organizations, including Meta, a popular social media company.
Meta Cuts Down On Staff Capacity
Due to the ongoing crisis in the United States economy, Meta has decided to cut down its staff capacity. According to the firm’s announcement on March 14, it plans to lay off 10,000 employees in 2023 to stay afloat in the rising competition. The company also noted this move would enable it to invest in the metaverse to sustain optimum operation in the face of economic challenges.
Meta CEO Mark Zuckerberg further highlighted the major essence of Meta in the U.S. economy. He cited that the firm aims to improve technology proficiency while enhancing financial performance during the economic crisis.
To achieve this goal, Zuckerberg noted that the firm would strengthen some essential developer tools and productivity. Additionally, the company will streamline its operations by removing unnecessary processes and roles to understand what’s required clearly.
In another statement from the CEO, the move to relieve 10,000 employees of their responsibility in the company will begin on March 15. The dismissal process will occur throughout the next three months. On March 15, affected employees will get a dismissal notice, and in late April, a part of the layoff will occur, including further restructuring in the technology department.
Later in May, the final round of the layoff will take place, affecting team members in the business department. But besides the move to reduce staff capacity, Zuckerberg also cited that he would shut down 5,000 unfilled positions in the company in the same period.
However, the CEO mentioned that the layoff might last longer than three months and may continue for the rest of the year.
Past Layoffs Of Meta And Other Firms
Meanwhile, this is not the first time the company has been carrying out this action. In November 2022, Meta announced the largest layoff ever recorded in the company. According to a report from Bloomberg, Zuckerberg noted that he would trim the staff capacity in the second week of the month.
The firm planned to lay off more than 87,000 employees, which led to the suspension of hiring new intakes. The company also instructed the staff to terminate all nonessential travel in the week of the announcement. The reason for the layoff was hinged on the gradual growth of the company and tech giants in general in the same period.
Aside from the layoffs of Meta, some other companies also trimmed their staff capacity to survive the turbulent economic times. A few examples are OpenSea, Coinbase, and Twitter.
Featured image fro CNBC and chart from Tradingview.com