Facebook owner Metaplatforms (META) is reportedly planning another round of layoffs that will cut thousands of employees starting this week. Meta stock soared on the news.
The company is seeking to prepare the redundancy plan before chief executive Mark Zuckerberg goes on parental leave for his third child, Bloomberg reported.
This 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 layoffs
In the morning trades on the stock market todayMeta stock rose 1.2% to 187.04.
Meta stock has doubled since early November, when the company announced its first round of layoffs. At the time, Zuckerberg pledged to make 2023 a “year of efficiency” for the embattled social media giant. Meta stock soared as the company also announced $40 billion in new share buybacks.
As of February 27, more than 120,000 tech workers 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 industry.
The current wave of job cuts reached a breakneck pace from October. From there to January, 147,000 tech layoffs were announced.
Almost half were from tech giants Amazon (AMZN), parent company of Google Alphabet (GOOGL), Microsoft (MSFT) And Selling power (RCMP).
Facebook hit by fears of economic recession
Meta, like all social media companies, is struggling due to a sharp reduction in advertising as companies grapple with macroeconomic concerns, fears of a recession and rising interest rates. It comes as Facebook is spending billions on a gamble to build the “metaverse”, a virtual reality world that has yet to take root.
Layoffs in the tech industry are the result of overhiring that began in mid-2020, Lee said. It was a time when tech companies expected consumers to go on a spending spree after the Covid-19 pandemic threats lifted. But that didn’t happen.
Meta stock is up 48% this year.
Please follow Brian Deagon on Twitter at @IBD_BDeagon to learn more about tech stocks, analysis and financial markets.
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