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Meta Platforms, Inc.META▼‎-0.32%‎

Meta Platforms, the billionaire's social media empire, will reportedly cut thousands more jobs.

Mark Zuckerberg Delivers Very Bad News
Mark Zuckerberg Delivers Very Bad News© Provided by TheStreet

Mark Zuckerberg made clear: 2023 would be the year of efficiency at Meta Platforms.

He proposed a severe austerity plan that could be hardened further at any time. And critical to the effort at Facebook's parent were cutting massive numbers of jobs and tossing projects deemed unimportant.

"Meta’s Year of Efficiency," the company's  (META) - Get Free Report chief executive called 2023 in a blog post last month. "As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs -- and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long-term vision."

The pivot in strategy, which followed "rapid revenue growth year after year," stems from the fact that the "world economy changed, competitive pressures grew, and our growth slowed considerably," Zuckerberg explained.

"We should prepare ourselves for the possibility that this new economic reality will continue for many years," he warned.

Meta's Jobs Bloodbath Is Not Over

As a result, the social-media stalwart cut 21,000 jobs from last November through mid-March. First came a wave of 11,000 cuts on Nov. 9, followed in mid-March by another 10,000.

And the bloodbath is not over, according to the latest reports. Meta plans to eliminate thousands more jobs. According to Bloomberg News, an internal memo has been sent to managers, asking them to prepare for tough new announcements. 

The job cuts, which total 4,000, are expected to affect Facebook, WhatsApp and Instagram. 

They would also affect Reality Labs, the division that houses the group's metaverse projects -- Quest virtual-reality headsets. In 2021 and 2022, Reality Labs, which is supposed to build the company's next big thing, recorded a cumulative loss of nearly $24 billion, including $13.7 billion just last year.

"This will be a difficult time as we say goodbye to friends and colleagues who have contributed so much to Meta," Lori Goler, Meta's head of people, wrote in the memo.

A Meta spokesperson confirmed the reports but added that it was the execution of announcements made in mid-March. The spokesperson then referred to the CEO's blog post.

Meta  (META) - Get Free Report plans to reorganize teams, while the remaining employees will be reassigned to work under new managers. 

The company has asked North American employees who can work from home not to come to the office this Wednesday in preparation for the announcement.

The company had 86,482 employees as of December 2022.

Meta Efficiency Update Expected in Q1 Report

Meta on April 26 is set to report first-quarter results, during which Zuckerberg will no doubt provide an update on his "Year of Efficiency." 

Investors particularly want to know whether these drastic cost reductions have started to bear fruit at a time when the company, like other tech firms, has joined the artificial-intelligence ​​arms race.

In the fourth quarter of 2022, Meta's revenue fell 4% to $32.1 billion, while net income dropped 55% to $4.65 billion. 

Facebook monthly active users were 2.96 billion at Dec. 31, an increase of 2% year over year.

"After restructuring, we plan to lift hiring and transfer freezes in each group," Zuckerberg said in his March's blog post. 

"Other relevant efficiency timelines include targeting this summer to complete our analysis from our hybrid work year of learning so we can further refine our distributed work model. We also aim to have a steady stream of developer productivity enhancements and process improvements throughout the year."

In other words, Meta isn't done cutting jobs yet.