Proactive Investors - Shares of Facebook (NASDAQ:META) and Instagram’s parent company Meta Platforms Inc (NASDAQ:FB) rose 5.4% in New York on Tuesday morning after the tech giant announced plans to lay off another 10,000 workers just months after it reduced its headcount by about 11,000 jobs.
The company will also be closing around 5,000 additional open roles that haven’t been hired yet.
Announcing the move in a Facebook post, Meta CEO Mark Zuckerberg said the layoffs would take place over the coming weeks, starting with notifying impacted members of its recruiting team tomorrow.
“We expect to announce restructurings and layoffs in our tech groups in late April, and then our business groups in late May,” he said. “In a small number of cases, it may take through the end of the year to complete these changes.”
He noted that, after restructuring, the company plans to lift hiring and transfer freezes in each group.
When announcing a massive 13% cut to the workforce in November, Zuckerberg issued a mea culpa, admitting he "got this wrong" when he had stepped up investment during the pandemic.
Victoria Scholar, head of investment at Interactive Investor, said Zuckerberg was taking drastic action in terms of reducing the size of Meta’s workforce to achieve cost cuts after last year’s turmoil in the sector which hit Facebook’s parent company hard.
“In terms of investor confidence, his aggressive approach seems to be paying off,” Scholar said. “The stock has already rebounded by more than 50% year-to-date with shares extending gains today.”
Scholar said the pressures on the tech sector from last year from weak economic growth, slowing ad revenues, sky-high inflation, and rising interest rates all remain, suggesting further tech sector job cuts could be on the cards.
“Given that share prices have responded so positively to major lay-off within Big Tech, it is possible to see how tech companies would be tempted to trim the fat further,” she said.
With the 11,000 jobs cut in November, and the 10,000 announced Tuesday, Meta’s headcount has been reduced from about 87,000 as of September 2022 to approximately 66,000 employees.