Meta Implements New Round of Layoffs Despite Strong Financial Performance in 2024

Restructuring continues as part of the “year of efficiency”, affecting WhatsApp, Instagram and Reality Labs divisions.

Meta Implements New Round of Layoffs

Meta has initiated another wave of layoffs, impacting teams across its divisions, including WhatsApp, Instagram, and Reality Labs. These reductions come as part of the company’s ongoing strategy to realign its resources in line with long-term goals and its location strategy, despite demonstrating remarkable financial growth throughout 2024.

Affected Teams and Scope

The layoffs have impacted several key divisions, including:

• WhatsApp

• Instagram

• Reality Labs (Meta’s virtual reality and augmented reality technology unit)

While Meta has not disclosed the exact number of employees affected, the restructuring involves moving some teams to different locations and reassigning others to new roles. These layoffs are part of Meta’s broader effort to enhance efficiency and ensure resources are concentrated on high-priority areas.

Notable Impacts

Among the affected employees is Jane Manchun Wong, a high-profile software engineer who gained prominence for discovering unreleased features in popular social media apps. Wong joined Meta’s Threads team in 2023 and recently announced her layoff on social media, bringing attention to the personal impact of these ongoing workforce reductions.

Meta’s Official Statement

A Meta spokesperson commented on the layoffs on 16th October, stating:

“Today, a few teams at Meta are making changes to ensure resources are aligned with their long-term strategic goals and location strategy. This includes moving some teams to different locations and moving some employees to different roles. In situations like this when a role is eliminated, we work hard to find other opportunities for impacted employees.”

Context of Ongoing Restructuring

These recent layoffs are not an isolated event. They are part of a larger trend of workforce reductions at Meta since 2022:

• In 2022, Meta laid off around 11,000 employees, or 13% of its workforce, after an overestimation of its growth prospects following the COVID-19 pandemic.

• In 2023, another 10,000 jobs were cut, and 5,000 open positions were withdrawn, aligning with CEO Mark Zuckerberg’s focus on operational efficiency.

• Earlier in 2024, Meta eliminated additional positions within Reality Labs, as the company continues to refine its focus on virtual and augmented reality technologies.

These actions align with Zuckerberg's declaration of 2023 as the "year of efficiency," a strategy that appears to be extending into 2024.

Strong Financial Performance in 2024

Interestingly, these layoffs are occurring during a period of exceptional financial performance for Meta. The company has posted significant gains throughout the year, with profits and revenues consistently exceeding market expectations:

• In Q1 2024, Meta reported a net income of $12.37 billion, more than double the $5.71 billion it earned in Q1 2023.

• In Q2 2024, net income rose to $13.47 billion, a 73% increase compared to the same period in 2023.

• Revenue also saw substantial year-over-year growth, with $36.46 billion in Q1 2024 (a 27% increase) and $39.07 billion in Q2 (a 22% increase).

These strong financial results are reflected in Meta's stock performance, with its stock price surging 73% in 2024, from a low of $344.47 in January to a high of $595.94 by October. The company’s growth has been driven by effective monetisation of its platforms, strong ad revenue, and investments in artificial intelligence, particularly Meta AI.

Meta's Ongoing Investments in Emerging Technologies

Despite the layoffs and operational efficiency measures, Meta continues to invest heavily in emerging technologies. The company’s Reality Labs division, which focuses on virtual and augmented reality, remains a priority, although it currently operates at a financial loss. CEO Mark Zuckerberg has cited the development of Meta AI as a major driver of the company’s growth.

Meta’s financial strength is further underscored by its liquidity position, with the company holding $58.08 billion in cash and marketable securities as of June 2024. Free cash flow for Q2 2024 was an impressive $10.90 billion, indicating the company's ability to maintain robust liquidity while navigating restructuring efforts.

Summing Up

While Meta continues to adjust its workforce through targeted layoffs, the company’s strong financial performance in 2024 underscores its resilience and strategic focus. With major investments in artificial intelligence and virtual reality, and a commitment to driving efficiency, Meta is balancing short-term workforce reductions with long-term growth. Although the layoffs affect high-profile employees like Jane Manchun Wong, Meta remains positioned for continued expansion, with revenue projections for Q3 2024 in the range of $38.5–41 billion. However, regulatory challenges, particularly in the EU and US, could pose hurdles to future growth.

Despite these challenges, Meta’s financial results, stock performance, and strategic investments point to a company focused on staying competitive in a rapidly evolving tech landscape.