Facebook parent company Meta and Google are looking at ways to cut costs, including through downsizing.
Why it matters
The steps show how companies are preparing for an economic downturn.
Alphabet’s Facebook parent Meta and Google are reportedly cutting staff as the tech giants look to cut costs amid slowing growth.
Citing people familiar with those decisions, The Wall Street Journal reported Wednesday that Meta plans to cut its costs by at least 10% over the next few months. Meta-executives didn’t use the term layoffs, instead trying to downsize by reorganizing departments and giving workers some time to apply for other positions within the company, the report said. Google also requires some employees to apply for new roles.
Meta and Google’s efforts to cut costs show how the companies that make money from selling ads are preparing for an economic downturn. It is unclear how many employees will be affected by these measures. Both companies have previously signaled that they are looking at ways to cut spending.
Meta spokesman Dave Arnold referenced comments from executives made during the company’s earnings call in July. At the time, Meta CEO Mark Zuckerberg said the company plans to “steadily scale back headcount growth over the next year.” Since the third quarter of last year, Meta has also lowered its cost guidance. The social media giant has invested heavily in virtual reality and augmented reality as part of its ambitions to create the Metaverse, a more immersive web where people can connect, work, and play in virtual spaces, but the company doesn’t anticipate that to benefit from these efforts for years. As of June 30, Meta had 83,553 employees.
Alphabet Chief Executive Sundar Pichai reportedly told Google employees in July that the company would hold back on hiring for the rest of the year, urging employees to “be more entrepreneurial.” “In some cases, this means consolidating where investments overlap and streamlining processes. Other times, that means pausing delivery and reallocating resources to higher priority areas,” Pichai told staff in an email. As of June 30, Alphabet had 174,014 full-time employees.
Meta and Google have reportedly set time limits on how long employees must find another job internally. Meta employees have about 30 days and Google employees typically have about 60 days to apply for other positions at the company if their positions are eliminated, the Journal reported. However, this time may be longer depending on other factors such as B. whether an employee’s project has been eliminated and which team the employee belongs to.
Google and the Alphabet Workers Union did not immediately respond to a request for comment. A Google spokesman told the Journal that nearly 95% of employees who expressed an interest in staying at the tech giant found a new job by the deadline.
Other tech companies have resorted to layoffs. Snap, the parent company of the disappearance messaging app Snap, announced it would cut about 20% of its staff.
CNET’s Imad Khan contributed to this report.