Meta Platforms (META) unveiled its second major round of jobs cuts in the four months Tuesday with plans to reduce its global staff by around 10,000 people in the coming weeks.
Meta, which began its maiden round of job cuts -- the first in company history -- late last year, said Tuesday that it would reduce its global headcount by 10,000 and close out an additional 5,000 roles that are currently being advertised but haven't yet been filled.
Meta, the parent company of Facebook, Instagram and WhatsApp, posted softer-than-expected fourth quarter earnings of $1.76 per share, well shy of the Street's $2.22 forecast, thanks in part to a $4.2 billion charge linked to last year's massive layoffs and office closures.
The group's focus on cost-cutting -- and multiple references to 'efficiency' in the fourth quarter earnings call -- has earned Meta host of upgrades and price target boosts from Wall Street as the broader digital ad industry faces a pullback in corporate marketing spend and softer consumer discretionary spending trends.
"This will be tough and there's no way around that. It will mean saying goodbye to talented and passionate colleagues who have been part of our success," CEO Mark Zuckerberg said in a company-wide message. "They've dedicated themselves to our mission and I'm personally grateful for all their efforts. We will support people in the same ways we have before and treat everyone with the gratitude they deserve."
A leaner org will execute its highest priorities faster. People will be more productive, and their work will be more fun and fulfilling," Zuckerberg added. "We will become an even greater magnet for the most talented people. That's why in our Year of Efficiency, we are focused on canceling projects that are duplicative or lower priority and making every organization as lean as possible."
Meta shares were marked 5.2% higher in early Tuesday trading to change hands at $190.20 each, a move that would extend the stock's year-to-date gain to around 52%.
The Meta job cuts will only add to concerns that the tech sector is spiraling into recession, a view that was intensified by the collapse of SVB Financial (SIVB) last week and the subsequent decline in funding channels for start-ups and early-stage growth companies.
Last week, Challenger, Gray & Christmas reported 77,770 February job losses in its closely-tracked tally of U.S. corporate layoffs, the highest since 2009.
The Challenger report in fact noted that U.S. companies, most of them in the tech space, have unveiled nearly 181,000 new job cuts so far this year, more than four times the total over the same period in 2022, as the Fed amped-up its hawkish rate rhetoric.
"The shock in the tech sector will be profound, and cashflow problems among the bank’s former customers—whose deposits are now frozen—will trigger layoffs.," said Ian Shepherdson of Pantheon Macroeconomics. "But we doubt that the SVB collapse will be followed by a wave of failures at large institutions; their balance sheets are fundamentally different."
