What’s happening
Facebook parent company Meta and Google are looking at ways to cut costs, including by reducing staff.
Why it matters
The moves show how the companies are bracing for an economic downturn.
Facebook parent company Meta and Alphabet’s Google are reportedly cutting staff as the tech giants look to slash costs amid slowing growth.
The Wall Street Journal, citing people familiar with these decisions, reported on Wednesday that Meta is looking to slash its costs by at least 10% within the next few months. Meta executives haven’t used the term layoffs but are trying to cut staff by reorganizing departments and giving workers a certain amount of time to apply for other roles within the company, according to the report. Google is also requiring some employees to apply to new roles.
Meta and Google’s efforts to slash costs show how the companies, which make money through selling ads, are bracing for an economic downturn. It’s unclear how many employees will be impacted by these moves. Both companies have previously signaled that they were looking at ways to cut expenses.
Meta spokesman Dave Arnold pointed to remarks executives made during the company’s earnings call in July. Meta CEO Mark Zuckerberg said at the time that the company plans “to steadily reduce headcount growth over the next year.” Meta has also been reducing its expense guidance since the third quarter last year. The social media giant has been investing heavily in virtual reality and augmented reality as part of its ambitions to create the metaverse, a more immersive internet where people will be able to socialize, work and play in virtual spaces, but the company doesn’t expect to make a profit 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 the company would slow hiring for the rest of the year and urged employees to be “more entrepreneurial.” “In some cases, that means consolidating where investments overlap and streamlining processes. In other cases, that means pausing deployment and re-deploying resources to higher priority areas,” Pichai told employees in an email. As of June 30, Alphabet had 174,014 full-time employees.
Meta and Google reportedly set time limits for how long employees have to find another job internally. Meta employees have about 30 days and Google employees typically have about 60 days to apply for other roles in the company if their jobs were eliminated, The Wall Street Journal reported. That time could be longer though depending on other factors such as whether a worker’s project was eliminated and what team they’re part of.
Google and the Alphabet Workers Union didn’t immediately respond to a request for comment. A Google spokesman told The Wall Street Journal that almost 95% of employees who expressed interest in staying with the the tech giant found new roles within the time limit.
Other tech companies have resorted to layoffs. Snap, the parent company of disappearing messaging app Snap, announced it would cut about 20% of its staff.
CNET’s Imad Khan contributed to this report.
