Facebook owner Meta Platforms reportedly is planning another round of layoffs that will cut thousands of employees as soon as this week. Meta stock edged down on the news.
The company looks to have the layoff plan ready before Chief Executive Mark Zuckerberg goes on parental leave for his third child, Bloomberg reported.
It would be the second major round of layoffs at Meta. In November, Meta cut 11,000 employees, or 13% of its workforce.
The Bloomberg report said Meta expects to cut "thousands," but did not give a specific number.
Meta Stock Climbs On Layoff News
Meta stock dipped 0.2%, closing at 184.51, on the stock market today.
Meta stock has doubled since early November when the company announced its first round of layoffs. At the time, Zuckerberg vowed to make 2023 a "year of efficiency" for the beleaguered social media giant. Meta stock soared as the company also announced $40 billion in new share repurchases.
As of Feb. 27, more than 120,000 tech employees have lost their jobs in 2023, Roger Lee, founder of Layoffs.fyi, said in an interview with IBD last week. Layoffs.fyi tracks layoffs in the tech sector.
The current spate of job cuts reached a blistering pace beginning in October. From then through January, 147,000 tech layoffs were announced.
Nearly half came from tech giants Amazon, Google parent Alphabet, Microsoft and Salesforce and Meta.
Facebook Hit By Economic, Recession Fears
Meta, like all social media companies, is struggling due to a sharp reduction in advertising as companies squirm over macroeconomic concerns, fears of a recession and higher interest rates. This is happening as Facebook is spending billions on a risky bet to build the "metaverse," a virtual reality world that has yet to take hold.
The tech industry layoffs are a result of overhiring that started in mid-2020, Lee said. It was a time when tech businesses were expecting consumers to go on a spending spree after the Covid-19 pandemic threats lifted. But that didn't happen.
Meta stock is up 53% this year.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
