Meta plans to lay off thousands of employees this week

It was reported that Meta, which operates Facebook and Instagram, plans to lay off thousands of employees for the first time since its foundation in 2004. Following Twitter, which let go of 3,700 executives and staff members – about half of its employees, Meta will also carry out a large-scale restructuring. A series of layoffs by big tech firms, which mass-recruited developers by significantly increasing employment during the COVID-19 pandemic, implies the end of the era of investing in potential, rather than performance.

The Wall Street Journal reported on Sunday (local time) that Meta is preparing for large-scale layoffs as early as Wednesday. The size of layoffs of the company, which has over 87,000 executives and staff members, is expected to be larger than Twitter’s 3,700. The Wall Street Journal said the number of Meta employees expected to lose their jobs could be the largest among a recent series of layoffs by big tech companies, quoting an industry source.

Meta has hired over 42,000 employees since 2020, when COVID-19 spread. The size of its employees is almost double its size in 2019 before the pandemic. However, its performance has been lacking. As consumers spent more time on social media, instead of dining or traveling, during the pandemic, the company’s net profit surged by 57.67 percent in 2020, but it quickly fell by about 50 percent in the third quarter of this year as the pandemic died down. U.S.-based investment advisory firm Evercore ISI's Julian Emanuel said to Bloomberg that big tech companies’ values should be backed by performance now.


Hyoun-Soo Kim kimhs@donga.com