Report: Meta set to become latest Silicon Valley firm to announce layoffs

PALO ALTO -- Even the metaverse can't escape the growing wave of layoffs sweeping through the Silicon Valley during the current economic slowdown, according to a report Sunday in the Wall Street Journal.

Meta Platforms Inc., the parent company of Facebook, Instagram and WhatsApp, could announce large-scale layoffs this week involving thousands of positions, the Journal reported.

As of its latest earnings statement, Meta has more than 87,000 employees. The planned layoffs would be the first large scale reduction to occur in the company's 18-year history.   

A company spokesman refused to comment on the report Sunday, but pointed to the recent earnings call from founder Mark Zuckerberg.

"In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today."

Quoting sources, the Journal reported that company officials already told employees to cancel nonessential travel beginning this week.

While the layoffs are news worthy, they will not approach the sheer number of job cuts put in place last week at Twitter by Elon Musk as he took over the company.

The San Francisco-based social media giant told workers by email Thursday that they would learn Friday if they had been laid off. About half of the company's staff of 7,500 was let go, Yoel Roth, Twitter's head of safety & integrity, confirmed in a tweet.

Musk tweeted late Friday that there was no choice but to cut the jobs "when the company is losing over $4M/day." He did not provide details on the daily losses at the company and said employees who lost their jobs were offered three months' pay as a severance.

While Twitter's downsizing might be hogging the spotlight, the social media giant does not stand alone. The tech industry has seen months of steady layoffs now, affecting many across the Bay Area.

"In the back of your mind, I guess, you expect that it could happen," 'Bart' said of his layoff notice. "But it was pretty sudden."

'Bart', who would rather not reveal his identity, worked for Stripe until Thursday. Like a lot of tech companies, the online payment giant, which has its US headquarters in South San Francisco, saw a boom during the pandemic. Now it's cutting 14% of its staff.

"I think a lot of people over hired, that is a big part of it," he said of the industry wide layoffs. "A lot of companies had a lot of growth during COVID and over hired."

"This is a rebalancing," explained Olaf Groth, a professor at UC Berkeley Haas School of Business, and CEO of Cambrian Futures. "I think that it was coming. Like we had in 2000, and I think it's going to happen periodically, yes."

Groth says the tech world has seen layoffs every three to five years, so that's not uncommon. What's different is this macroeconomic landscape. Inflation, geopolitical turmoil, and continuing talk of a looming recession paint things in a different light.

"But the good news is that there is hiring going on, which is why I'm calling it a rebalancing," Groth said. 

"Hopefully, in that balancing, we will get to that soft landing. If everybody was laying off then we'd have a fear of hard, rude awakening next year. But this way, with two steps forward, one step back, hopefully we can calibrate this so it doesn't become a wholesale bust in the economy."

"I think it's quite different," Bart said of this round of layoffs compared to previous years. "I do think it's gonna bounce back. For whatever it's worth, my inbox is pretty flooded. People are still hiring."

Widespread layoffs, and people still hiring. It's another sign of a complex, jumbled economy. And that's enough for Bart to be cautiously optimistic on this first day after losing his job,

"Going to use some time to recoup and figure out what's next," Bart said of his near term future. "But there's opportunity out there. So it's not totally dry, which is great."