Meta will begin a new round of staff cuts this week

Mark Zuckerberg will begin a second round of cuts to Meta’s workforce on Wednesday, according to people familiar with the matter, as he continues his push to cut costs in what he says is a “year of efficiency.”

The $469 billion social media company is preparing to shed thousands of jobs, several people said, as part of the chief executive’s push to get its finances under control as the economic slowdown has eroded its profits. This comes on top of cuts announced late last year, which affected 11,000 jobs from 87,000 at the time.

A growing number of high-ranking managers has also left the company in recent weeks, which has further increased internal uncertainty. Nada Stirratt, vice president of Meta’s sales organization for America, resigned Monday, according to three people familiar with the matter, and chief business officer Marne Levine left the company in February.

The deep cuts to Meta’s workforce come in response to investor frustration with the company’s inflated headcount and Zuckerberg’s decision to invest billions of dollars in building a “metaverse.”

Some team budgets have been frozen in anticipation of the cuts, while executives recently told some employees they would not award director-level promotions for certain teams, two people said. The uncertainty has caused disruption and low morale at the company for months, several insiders said.

“We have a real talent problem when there’s so much chaos,” said one executive, adding that it also has implications for promotions and compensation.

Like other companies that depend largely on ad spend, Meta has slumped this year amid tough macroeconomic conditions and competition from rivals like TikTok. At the same time, Zuckerberg has shifted his company’s focus to investing $10 billion annually in building a metaverse of digital avatars, an initiative that probably won’t be profitable for years.

In February, Zuckerberg announced that Meta — which owns Facebook, Instagram and WhatsApp — would adopt a mantra of “efficiency,” including scrapping ineffective projects and trimming some layers of middle management “to make decisions faster.” To achieve the latter, some managers are being asked to either move into roles where they don’t manage anyone, known as individual employee roles, or to leave the company.

According to people familiar with the matter, the latest cuts are expected to disproportionately hit policy, marketing and communications teams.

According to a Wall Street Journal report, the cuts are expected to come in multiple rounds over several months.

Meta declined to comment.

On Monday, Stephane Kasriel, Meta’s head of fintech, said on Twitter that the company is liquidating its digital collectibles, or non-fungible tokens, to “focus on other ways of supporting creators, people and businesses.”

The cuts are welcomed by Wall Street. Meta’s improved fourth-quarter earnings outlook has already sent its shares up 18 percent, adding $88 billion to its market value. In an equity research by Jefferies this month, analysts wrote, “We believe further job cuts are needed to offset over-hiring over the past two years.”

However, staff have complained of delays on projects and a lack of staff motivation amid the specter of the second round of cuts so soon after the November round.