With a tremendous amount of uncertainty in the economy, many companies, particularly those in the tech sector, have been trying to reduce their overhead expenses. Now, it appears that Meta, the company that most people know as Facebook, is joining this group. Recently, Meta announced that it was undergoing a restructuring, and it was cutting 10,000 jobs in the process. In addition, the company announced that 5,000 vacancies that had not yet been filled would remain unfilled. This follows a round of cuts that took place in November, where the company laid off approximately 11,000 people. In total, it is believed that these layoffs represent somewhere between 15 and 25 percent of the company.
In filings with the SEC, the company announced that it had lowered its expenses from approximately $92 billion to approximately $86 billion. Shares of the company’s stock rose more than five percent in response to the news. Zuckerberg said that this further proves that the company is dedicated to making 2023 a year of efficiency. The goal is to make the organization stronger and more nimble, even while cutting jobs.
The organization is also finding other ways to cut its resource use to remain more nimble. For example, he announced that the company would be evaluating many of its projects to see which ones aren’t performing in an effort to further cut expenses.
This is not the only company in the sector cutting jobs. Some of the other companies that are cutting their employees include Amazon, Dell, Zoom, and Google. Many other companies have already slashed their workforces in an effort to reduce their overhead expenses.
There are many reasons why these companies are scaling back their workforces, and many of these have to do with advising interest rates. These companies are going to have a difficult time borrowing money to fund new projects, particularly with interest rates as high as they are. In addition, as consumers change their spending habits in response to higher interest rates, these companies may be anticipating reduced sales, so they are trying to reduce their overhead expenses as well by cutting the amount of money they spend on jobs. It will be interesting to see what happens next.
