Facebook parent Meta is said to be planning the first major layoffs in its history as the company grapples with a shrinking business and fears of an impending recession.
The job cuts are expected to affect thousands of workers and could begin as early as this week, the Wall Street Journal reported over the weekend, citing unnamed people with knowledge of the matter. Meta has more than 87,000 employees, according to its September SEC filing.
Meta declined to comment on the report.
In a conference call last month to discuss its third-quarter earnings results, CEO Mark Zuckerberg said he expects the company to end 2023 “as about the same size or even a slightly smaller organization than we are today”.
The potential cuts come as tighter advertiser budgets and Apple’s iOS privacy changes have weighed on Meta’s core business. The company last month posted its second quarterly decline in revenue and reported that profits halved from a year earlier. The drop in profitability is largely due to the billions Meta is spending to build a future version of the Internet called the metaverse, which is likely years away.
Meta once had a market capitalization of over $1 trillion last year, Meta’s value today is around $250 billion. (After reports of job cuts, Meta stock opened more than 5% higher on Monday morning.)
Meta is far from the only tech company said to be reviewing staff. In a surprising turnaround for an industry sometimes considered untouchable, some tech companies have announced hiring freezes or job cuts in recent months, often after seeing rapid growth during the pandemic.
Facebook rival Twitter made sweeping cuts at the company on Friday under its new owner, Elon Musk. The cuts affected its ethical AI, marketing and communications, search and public policy team, among other departments.
In the days since, however, Twitter ( TWTR ) has reportedly asked dozens of laid-off employees to return, according to Bloomberg.
