Following a 23% surge in its fourth quarter earnings, what appears to be a win for Facebook's parent company Meta, may in fact be a loss for its remaining employees, as Zuckerberg signals a new potential round of layoffs.
The announcement, shared in the social media giant's ‘2022 fourth quarter and full year financial report', saw Zuckerberg claim 2023 to be the ‘Year of Efficiency' where the company will be focus on building a stronger and more ‘nimble' organization, suggesting further consolidation efforts may be on the way.
Meta's New ‘Year of Efficiency'
This week, according to CNBC, Meta recorded its best stock day in nearly a decade, with a reported 23% growth in shares, following a 52% year on year drop in income in 2022.
According to its fourth quarter and full year 2022 report, Meta took several measures to ‘pursue greater efficiency' and realign their business and strategic priorities, with mass layoffs being a necessary in their efforts to restructure.
During the quarter ended December 31, 2022, we took several measures to pursue greater efficiency and to realign our business and strategic priorities. This includes a facilities consolidation strategy to sublease, early terminate, or abandon several office buildings under operating leases, a layoff of approximately 11,000 of our employees across the FoA and RL segments, and a pivot towards a next generation data center design, including cancellation of multiple data center projects.
The total costs saw the company spend over $3.7 billion in restructuring. But, according to Zuckerberg, those efforts were ‘not the end' of their focus on efficiency, it was only the beginning.
This wouldn't be the first time that a company has gone through as a ‘second phase of restructuring' following a mass round of layoffs, but with more than 11,000 jobs cut in 2022, how many more heads can Meta afford to lose?
Layoffs the ‘Beginning' of Efficiency, Not the End
Commenting on layoffs, Zuckerberg described the decision to cut 11,000 staff in 2022 as ‘difficult', but went on to say the the company plans to take further steps in 2023 to improve company-wide efficiency, signalling middle management to be next on the chopping block.
Anticipated reports of Meta's 2023 revenue and full-year expenses also indicate a potential second-phase restructuring in play. A 2% year-over-year growth is expected in the first quarter, with full-year expenses lowered from $94-100 billion to $89-95 billion, and expected capital expenditures lowered from $34-27 billion to $30-$33 billion.
The report also revealed that the company ‘may incur additional restructuring charges' as it progresses further in its ‘efficiency efforts'.
Are Layoffs Necessary, Or Can They Be Avoided?
If the past year is anything to go by, reducing staff is the default to reducing a company's overall spending. But with a growing demand for leaders to increase productivity, and companies struggling to retain their top talent, businesses may need to start considering alternative solutions.
Introducing remote work is a great way for businesses to reduce their overhead spend — with no need for office space, companies can claw back costs without losing their top talent. Investing in cross-training programs can also help your teams to upskill in other areas, and reducing hours could be a welcome alternative to employees in want of a better work-life-balance.
Project management and web conferencing tools such as Zoom and Microsoft Teams are great ways to help your team streamline their work and stay connected. Improving communication and workflow is a great way to improve productivity, and with enough support, will help you to keep an eye on, and retain your top talent.
Read more: How to effectively manage a remote team