Meta, the company formerly known as Facebook, launched a new round of job cuts this week, despite a recent rebound in its stock price that has added some USD $320B to its market value.
After cutting around 11,000 jobs, or around 13% of its workforce, last November, Meta announced a second round of layoffs in March.
Those layoffs began on Tuesday (April 18), according to a report at CNBC which noted that Meta employees had taken to LinkedIn to announce they had lost their jobs.
Meta is on track to cut its workforce by 21,000 people in the wave of layoffs that have hit the tech sector since last year.
According to layoffs.fyi, a website that tracks job reductions in tech, Meta’s cuts are the second-largest in the sector, behind only Amazon, which has announced 27,000 redundancies.
According to a report at Vox, Meta’s layoffs this week focused on product-facing teams working on the company’s various brands, including Facebook, Instagram, Reality Labs and WhatsApp.
Most of Silicon Valley’s biggest names saw their stock prices plunge last year, amid a stock market correction brought on by concerns about inflation and rising interest rates.
Meta’s stock price slid by more than 75% from a peak of around $378 per share in September 2021, to around $91 in November 2022.
But since then, it has seen a large rebound, with the stock price rising to $215 in trading this week.
That increased the company’s market capitalization to $553 billion, from a low of around $236 billion in early November 2022.
This week’s job cuts are expected to affect around 4,000 people, Vox reported. The remainder of this round of cuts is expected to take place in May, when business-facing staff – such as those in finance, HR and legal – will be affected, CNBC said.
During the boom years prior to this year’s slowdown, tech giants like Meta, Google parent Alphabet, Microsoft and others expanded their hiring rapidly.
“We were just sitting there. We had to basically fight to find work. It was a very strange environment and it kind of seemed that Meta was hiring people so that other companies couldn’t have us and they were just hoarding us like Pokémon cards.”
Brit Levy, ex-Meta employee
But with interest rates spiking over the past year, as central banks struggled to keep inflation in check, access to capital became more difficult, and many of these tech firms are now busily cutting back their workforces.
In some instances, the Silicon Valley giants may have gone too far in their hiring. In a series of news stories that emerged over the past several months, laid-off tech employees asserted that they had been hired to “do nothing.”
“I am one of those employees that was hired into a really strange position where they immediately put me into a group of individuals that was not working,” former Meta employee Brit Levy said on social media, as quoted by Forbes.
“We were just sitting there. We had to basically fight to find work. It was a very strange environment and it kind of seemed that Meta was hiring people so that other companies couldn’t have us and they were just hoarding us like Pokémon cards.”
According to the Wall Street Journal, Levy’s assessment was correct: Cash-rich tech companies over-hired during the good times not only to ensure that they had a deep bench of talent, but also to keep skilled workers from going to the competition.
Additionally, rapid hiring was seen as a sign of prestige.
Layoffs have also affected the music industry and related businesses.
Spotify announced in January that it plans to cut 6% of its global workforce, which amounted to more than 500 people.
Like the Silicon Valley giants, Spotify had gone on a spending spree during the years of easy access to capital.
Warner Music Group told staff on March 29 that it plans to reduce its workforce by 4%, or about 270 people.
Layoffs also hit Switzerland-based Utopia Music last November, and this past March, Downtown Music Holdings announced layoffs across multiple divisions.
Neither company specified the number of job cuts.Music Business Worldwide
