Facebook's parent Meta plans to lay off 10,000 people in an effort to become more efficient, chairman and CEO Mark Zuckerberg announced in a blog post to employees Tuesday morning.
The post details the company's plans to improve efficiency this year. In the post, Zuckerberg says the layoffs are aimed are part of a larger restructuring and are aimed at improving the company's finances.
The blog post not specify how many of its employees in the Bay Area would be laid off.
In 2022, net income at Meta fell 41% while its costs and expenses grew by 23%. Revenue was down by 1%. Meta also reduced its workforce by 13% last year.
"For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products," Zuckerberg said in the post. "But last year was a humbling wake-up call. The world economy changed, competitive pressures grew, and our growth slowed considerably."
Layoffs will begin Wednesday for Meta's recruiting team. Zuckerberg added that its tech groups will go through restructuring and layoffs in late April, then the same will happen to its business groups in late May.
"In a small number of cases, it may take through the end of the year to complete these changes," Zuckerberg added. "Our timelines for international teams will also look different, and local leaders will follow up with more details."
Meta also plans to close about 5,000 roles for which it hasn't yet hired.
Fear of a recession in the U.S. has risen following interest rate increases by the U.S. Federal Reserve Bank.
Matthew Holian, an economist at San Jose State University, said forecasts indicate the U.S. may soon suffer a mild and short-lived recession.
The Fed has been raising interest rates to slow economic growth because that growth has been fueling inflation.
"You can't fight inflation without putting economic growth at risk," Holian said.
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Companies besides Meta have announced layoffs as well.
Google's parent company Alphabet announced layoffs in January of about 12,000 employees. In the same month, Microsoft announced it was laying off 10,000 and San Francisco-based Salesforce started cutting its workforce by 10%.
Salesforce chair and CEO Marc Benioff said to employees in a January 4th letter that even though the company has never been more critical to its customers, "The environment remains challenging and our customers are taking a more measured approach to their purchasing decisions."
In California, 195,000 people were laid off or fired in December, according to preliminary data and the latest for the state from the U.S. Bureau of Labor Statistics.
In the West, January layoffs and firings amounted to 476,000 people, according to preliminary B.L.S. data. Nationwide, the number was 2,298,000. In the technology sector, that same data shows 60,000 people nationwide were laid off or fired that month.
Despite the layoffs, "the labor market remains strong with the unemployment rate declining to 3.4 percent in January, the lowest level since May 1969," said Thuy Lan Nguyen, senior economist at Federal Reserve Bank of San Francisco in a March 9 research note.
Still, Nguyen said, "The U.S. economy has shown some signs of cooling."
Nguyen said real gross domestic product, a measure of overall growth in the economy, fell to a 2.7% annual rate in the fourth quarter. That's down from 3.2% in the previous quarter.
The manufacturing sector has been contracting, too.
