Back in February, InvestorPlace contributor William White posed an important question: are more Facebook job cuts coming? Two weeks later, we have an unsurprising answer. Parent company Meta Platforms (NASDAQ:META) just confirmed that more cuts are coming — and they won’t be small scale. While these Meta Platforms layoffs refer to the larger company and not Facebook specifically, it’s hard to imagine that the social media giant won’t be impacted.
CEO Mark Zuckerberg is planning a “year of efficiency” and his actions have made it clear this means reducing staff significantly. In November 2022, the company announced 11,00 job cuts. Now, reports indicate that this next round of layoffs will also be in the thousands.
META stock is responding positively to this news today, up more than 1% as of this writing. But does that mean investors shouldn’t be worried? Let’s dive deeper into what this latest development may mean.
The Meta Platforms Layoffs: A Closer Look
Thanks to the November 2022 job cuts, investors know what to expect from the incoming Meta Platforms layoffs. In short, nothing too worrisome. Since the earlier round of staff reductions, META stock has made impressive progress, rising more than 60% since mid November. This time around doesn’t appear to be any different. Shares haven’t risen by much today, but they are staying in the green.
While the company has prioritized growth through “flattening” measures, that doesn’t seem to be the driving force behind the pending layoffs. Speaking to Bloomberg, sources have confirmed that thousands of job cuts will likely be handed down as soon as this week. Per the outlet:
“The imminent round of cuts is being driven by financial targets and is separate from the ‘flattening’ […] Meta, which has seen a slowdown in advertising revenue and has shifted focus to a virtual-reality platform called the metaverse, has been asking directors and vice presidents to make lists of employees that can be let go.”
Few details have been provided regarding the divisions or companies that will be most impacted by these layoffs. However, the company’s careers page indicates that it’s still hiring in spaces like artificial intelligence (AI) and virtual and augmented reality. This suggests that Meta is continuing to focus on AI and metaverse tech at the expense of less successful projects.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
