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Meta Platforms, the parent company of Facebook, reported this Tuesday, March 14, that it would eliminate 10,000 jobs this year, in order to reduce costs. This is his second round of layoffs. And it won’t be looking to fill some 5,000 open jobs as the tech sector braces for a deep economic recession.
A new wave of layoffs is rocking the tech giants. Meta, the company that owns Facebook, Instagram and WhatsApp, cuts another 10,000 jobs.
Likewise, the company indicated that it will not cover 5,000 positions that it has vacancies to lower costs and will eliminate lower priority projects.
It is a strong blow for a company that last November announced the dismissal of another 11,000 people, around 13% of its workforce.
“This will be difficult, it is undeniable (…) It means having to say goodbye to talented and passionate colleagues who have been part of our success,” said Meta CEO Mark Zuckerberg.
According to a message from Zuckerberg delivered to staff, most of the cuts will take place in April and May, but others will be phased in until the end of the year.
“For most of our history, we’ve experienced rapid year-over-year revenue growth and had the resources to invest in many new products. But last year was humbling… I think we need to prepare for the possibility hope that this new economic reality will continue for many more years”, stressed the executive director.
The drastic move is expected to ease investor fears as revenue growth in Meta’s core businesses slows.
What are the reasons behind the wave of layoffs in the technology sector?
The decision announced on March 14 comes after Meta reported last February that its profits were reduced and its revenues decreased for the third consecutive quarter.
The organization indicated that a decrease in online advertising and competition from other companies such as TikTok influence its adverse results.
But the wave of layoffs has roots in decisions made more than two years ago, experts point out.
By then, and in the midst of the Covid-19 pandemic, both Meta and other technology giants were responding to a further boom in demand for e-commerce, increasing their profit projections and therefore proceeding with massive hiring.
Now, in a scenario of high global inflation, partly due to the consequences of the Russian war in Ukraine, the economy is being hit hard and the positive projections of companies in the technology sector are reduced.
The situation also affects other companies such as Microsoft that in the past January 18 announced the termination of 10,000 jobs.
Amazon, which has already carried out thousands of layoffs, was until now the company with the highest layoff record after announcing the elimination of 18,000 jobs last January.
The figure was surpassed this Tuesday by Meta with the new announcement.
The tech industry has laid off about 290,000 people since the start of 2022, about 40% this year, according to layoff tracking site layoffs.fyi.
With Reuters and AP
