Facebook's parent company Meta is laying off another 10,000 workers
SACHA PFEIFFER, HOST:
Meta is planning a second round of layoffs. That's the parent company of Facebook, Instagram and WhatsApp. And it announced yesterday it will cut another 10,000 jobs. This follows 11,000 layoffs at Meta last November. CEO Mark Zuckerberg has said that 2023 will be Meta's, quote, "year of efficiency." He also says it will be, in his words, stronger and more nimble. We're joined now by Wall Street Journal technology reporter Sam Schechner. Sam, thanks for coming on.
SAM SCHECHNER: A pleasure to be here.
PFEIFFER: These are a lot of layoffs, but I want to make sure we put it in the overall context of how large Meta is. So tell us, how many employees does it have now? How many will it have left once the layoffs are done?
SCHECHNER: Well, those are good questions. We know the numerator. We don't necessarily know the denominator. At the end of the year, Meta had roughly 86,000 employees. Most of those who are being laid off - the 11,000 from last fall - were still on the payroll, the company said. So if we're going by that and we add it together - you know, 21,000 people being let go - that could be nearly a quarter of Meta's workforce.
PFEIFFER: That's a lot. And how big a deal do you think that is in terms of the impact it has on the company?
SCHECHNER: Well, I mean, you can see it from - people inside the company are anxious. You know, Mark Zuckerberg sends a message to staff, and it's 2,200 words long. And, you know, there's some mea culpas in there. But there's also this vision that he's trying to get across of a leaner, more nimble company. And he's actually, at points in this memo, talking about how he thinks it will - and is making things operate more efficiently, more effectively than before.
PFEIFFER: During the pandemic, Meta and many other tech companies were just hiring madly. So are these layoffs essentially returning Meta to its pre-pandemic level, or do you see it going deeper than that? Any idea?
SCHECHNER: Well, we'll have to see where it ends up landing. But, you know, Mark Zuckerberg, in this memo, what struck me is that he said that this is something that he sees continuing for many years. It's a new economic reality. And I think that's a real tone shift from the go-go times in - at least for the earnings of tech companies during the pandemic, as you said, when Meta was counting on - and a lot of tech companies were counting on - a fundamental change in the way people operate. And that hasn't really panned out. And so now...
PFEIFFER: That it might have been just temporary.
SCHECHNER: Well, it appears to have been, at least in some ways, temporary. Even Meta's reversing its position on remote work in some ways and encouraging people to come back to the office.
PFEIFFER: Interesting. You know, Zuckerberg has said things like the layoffs were caused by things like rising interest rates, geopolitical tension, new regulations. Do you, Sam, based on your reporting, buy that? Do you believe that - those reasons?
SCHECHNER: I think those confluence of factors certainly are playing a role. And I think - you mentioned regulations. You know, Meta has to comply with a growing number of new rules and regulations. You know, there's new regulations coming into effect in the European Union that are going to require some big changes to how the company operates. There's changes that they've had to make because of, you know, privacy moves by Apple to cut off some of the data that they've been using that have also cut into their revenue. So I think all of those things together are factors.
PFEIFFER: Yeah, about those privacy settings - so Apple made a change that restricts the amount of data that apps collect. That has apparently hurt Meta's bottom line significantly - something like 10 billion in lost revenue last year. So has Apple really hurt Meta significantly by tweaking iPhone privacy options?
SCHECHNER: I mean, Meta has, you know, gone through an entire internal process to try to cope with these changes. This has been a major, major issue for their advertising business. In more recent quarters, they've said they've begun to see a path to recovery because they're using AI to help make up for some of that lost data, to infer some of the targeting information that they no longer can collect from their users' phones. You know, still, their revenue was down year on year in their most recent report.
PFEIFFER: Yeah. Last big-picture question, maybe 20 seconds or so - do you assume that other tech companies internally are now facing the same type of financial pressures Meta says it is?
SCHECHNER: Well, we've seen these kinds of layoffs ripple across Silicon Valley. And I think, you know, we've seen one round at a lot of big companies. May we see more? I think there is definitely pressure from investors and a new - you know, the era of free money is over for these Big Tech companies.
PFEIFFER: That's Sam Schechner. He covers technology for The Wall Street Journal. Sam, thank you.
SCHECHNER: A pleasure to be here.
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