Facebook parent Meta is said to be planning the first significant layoffs in its history as the company struggles with a shrinking business and fears of a looming recession, according to the Wall Street Journal.
The job cuts are expected to affect thousands of workers and could begin as early as this week, the Journal reported over the weekend, citing unnamed people familiar with the matter. Meta has more than 87,000 employees, according to a September SEC filing.
Meta declined to comment on the report.
On a conference call last month to discuss its third-quarter earnings results, CEO Mark Zuckerberg said he expects the company to end 2023 “as either about the same size, or even a little bit smaller organization than we are today.”
The possible cuts come as advertiser budgets tighten and Apple’s iOS privacy changes have weighed on Meta’s core business. The company posted its second quarterly revenue decline last month and reported that profits were halved from a year earlier. The drop in profitability is largely driven by the billions Meta is spending on building a future version of the internet called the metaverse that likely remains years away.
Once with a market capitalization of more than $1 trillion last year, Meta is now valued at around $250 billion. (Following reports of the cuts, Meta’s shares opened more than 5% higher on Monday morning.)
Meta is far from the only technology company said to be rethinking staffing. In an astonishing shift for an industry sometimes considered untouchable, a number of tech companies have announced hiring freezes or layoffs in recent months, often after seeing rapid growth during the pandemic.
Last week, ride-sharing company Lyft said it was laying off 13% of its workforce, and payment processor Stripe said it was cutting 14% of its workforce. On the same day, e-commerce giant Amazon said it was implementing a hiatus in corporate hiring.
Facebook rival Twitter made sweeping cuts across the company on Friday under its new owner, Elon Musk. The cuts affected the ethical AI, marketing and communications, search and public policy teams, among others.
In the days since, however, Twitter ( TWTR ) has reportedly asked dozens of furloughed employees to return, according to Bloomberg.