Summary: Meta is planning to cut approximately 5% of its workforce, or about 3,600 positions, in February. The cuts will be performance-based to “move out lowest performers faster” as it cited 2025 will be “an intense year.”
Meta Platforms announced plans to reduce approximately 5% of its workforce to remove low-performing employees amid what it describes as “an intense year,” according to an internal memo reported by Bloomberg and other sources. Meta’s shares fell 2.3% on Tuesday following the news.
Based on its third-quarter earnings report, Meta employs roughly 72,404 staff worldwide, meaning the cuts could affect approximately 3,600 workers. The memo indicated that impacted employees would receive “generous severance” in line with previous reductions. Employees in the US will be notified on 10 February, with notifications for non-US staff following at a later date.
A performance-based termination
Meta emphasised that the job cuts would be performance-based, intending to “move out low-performers faster” and hire new talent to fill those roles. “This is going to be an intense year, and I want to make sure we have the best people on our teams,” the memo stated.
Tech giants have intensified competition in artificial intelligence since Microsoft launched ChatGPT in March 2023. Heavy investment in data centre development has squeezed profit margins. Although Meta reported strong earnings for the September quarter, its annual net income growth slowed significantly. Meta anticipates “significant capital expenditures growth in 2025,” and “significant acceleration in infrastructure expense growth next year,” according to its earnings release.
The announcement represents the second major round of layoffs following a 25% workforce reduction in 2023, which saw approximately 21,000 jobs eliminated. CEO Mark Zuckerberg labelled 2023 as a “year of efficiency” after a challenging 2022, during which the company’s shares plunged by more than 60%. In contrast, 2024 was lucrative for Meta, with its shares rising 67% due to the AI boom and a more favourable macroeconomic environment.
Challenges persist amid metaverse losses
Meta’s controversial metaverse project has continued to weigh on its growth. The Reality Labs segment reported a loss of $12.76 billion (€12.38 billion) during the first nine months of 2024. The company expects “2024 operating losses to increase meaningfully year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem.”
Meta is set to release its fourth-quarter and full-year earnings results on 29 January. Investors will closely watch the company’s core business, particularly AI-powered advertising, which contributes more than 90% of overall revenue. “We had a good quarter driven by AI progress across our apps and business,” said CEO Mark Zuckerberg in the earnings statement in October.
Meta warms relations with Trump
Last week, Meta announced it would end its third-party fact-checking programme and reintroduce political content, including previously restricted topics such as immigration and gender. The move is seen as an effort to improve relations with President-elect Donald Trump ahead of his inauguration next week. Meta Platforms previously suspended Trump’s Facebook and Instagram accounts for two years in 2021 following the Capitol riot on 6 January. Trump had referred to Facebook as an “enemy of the people.”
Meta has also donated $1 million (€0.97 million) to Trump’s inauguration, alongside contributions from Amazon and OpenAI, according to CNBC. CEO Mark Zuckerberg is reportedly attending Trump’s inauguration on 20 January, along with Tesla CEO Elon Musk and Amazon founder Jeff Bezos.
