Meta Expected To Commence Cost-Cutting Measures Over Next Few Months

According to The Wall Street Journal (via Reuters), the social media giant, which was formerly known as Facebook Inc., is cutting costs by 10% over the next few months. But instead of formal layoffs, the company is said to be cutting jobs via internal reorganisations and giving affected employees a limited window to apply for other departments. The belief is that the move can help reduce the company's headcount while preempting the issuance of pink slips as it prepares for deeper cuts in the near future.

The news comes just a couple of months after Chief Product Officer Chris Cox told employees in a memo that they shouldn't expect an influx of budget or new engineers as the company was operating in an "environment of slower growth". Meta this week reiterated that it plans to reduce headcount within the next year.

Meta in its second-quarter earnings reports a 22% year-over-year increase in costs and expenses, which totals almost US$20.4 billion. A lot of the company's recent investments went into the development of the metaverse, the so-called next frontier of the internet. But because the projects related to the concept are still in development, the company has yet to see the returns from its investment.

Apple's privacy changes to iOS also impacted Meta's revenue. Introduced in the iOS 14 update, iPhone users have the ability to limit apps from tracking users and their data, which in turn made it harder for Meta to deliver targeted ads. The result of this led to some advertisers shifting their ad budget to other platforms.

Meta had about 83,553 employees on its payroll as of 30 June.

Google in July similarly announced it would be slowing down new hires for the rest of the year. It also urged employees to consolidate investments and streamline processes, among other cost-cutting activities.