layoffs
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Amid a production halt during a double strike, major talent agency CAA is undergoing a round of layoffs.
About sixty employees are set to be impacted — including agents, executives and support staff — within the next week, a source tells The Hollywood Reporter. The figure is a relatively small percentage of the thousands of staffers that work at the Century City-based representation giant led by Kevin Huvane, Richard Lovett and Bryan Lourd.
Multiple departments had been evaluating staffing levels even prior to when the Writers Guild of America strike began on May 2. When performer’s union SAG-AFTRA joined the strike on July 13, Hollywood settled in to a long summer as the dealmaking ecosystem ground to a halt.
Several talent agencies have cut staff in the ensuing months as the guilds faced off with the Alliance of Motion Picture and Television Producers, which bargains on behalf of studios. For instance, Endeavor, the owner of fellow “Big 3” agency WME and fashion-focused IMG, estimated on August 8 that the impact of the actors’ and writers’ strikes would be about $25 million per month in revenue.
Talent and literary agency Verve, which reps many scribes, cut about 60 percent of its assistants and 3 agents in late May. And Big 3 firm UTA had already made a round of cuts, which it described as a single digit percentage of a workforce that totals 2,000 employees, in February.
Hollywood’s agencies went through retrenchment and conducted notable layoffs or furloughs during the COVID-19 shutdowns in the middle of 2020, also at a time of a widespread production halt. At that time, in July 2020, CAA said it cut 90 agents and executives and further furloughed 275 assistants and other staffers.
Since that time, CAA made the most consequential move in the Hollywood talent agency space, acquiring rival firm ICM in a megadeal that closed last June and added 425 of its employees to the payroll, with 105 staffers cut. At the time, the combined company was said to have 3,200 employees in 25 countries.
Deadline earlier reported CAA’s planned cuts on Thursday.
This article was originally published by THR.com.
Swiss-based tech company Utopia Music is undertaking a fresh round of job cuts. In a memo to staff on Friday (July 20), co-founder/interim CEO Mattias Hjelmstedt said the company is closing its research and development offices in the United Kingdom and Finland, resulting in the loss of around 5% of its global workforce.
The closures come less than a week after distribution and music services company Absolute Label Services was reacquired from Utopia by its original owners. Billboard understands that around 25 jobs are being lost as a result of London-based Utopia UK (R&D) Ltd and Helsinki-based Utopia R&D Tech Finland Oy being shuttered.
In the staff memo, Hjelmstedt says the cuts are being made in line with the company’s “shifting focus from hyper-growth to sustainable growth and profitability.” Moving forward, writes Hjelmstedt, Utopia’s office in the Swedish capital city Stockholm — where the majority of its engineers are based — will remain the firm’s main research and development hub as part of “a leaner and more efficient setup.”
Utopia’s 10 other employing divisions or companies are not affected by the cost-cutting measures. They include Proper Music Group, the United Kingdom’s leading independent physical music distributor which provides distribution services for 1,000-plus indie labels and service companies. Also unaffected is Utopia Distribution Services, which in September 2022 acquired the assets of Cinram Novum, one of the United Kingdom’s leading physical home entertainment suppliers that provides warehouse, fulfillment and distribution services to a range of labels, including Universal Music Group, Sony Music Entertainment and [PIAS].
“While not taken lightly, consolidating our R&D entities is a necessary step,” Hjelmstedt writes, “as it will enable us to more efficiently deliver new products and improve our existing services.” He adds that all impacted employees will be considered for any future openings.
Friday’s announcement marks the third round of layoffs to take place at Utopia in just under nine months. In November, around 230 posts were cut (then representing 20% of the company’s global workforce), followed by a further 100 redundancies in April. High-profile exits in 2023 have included former CEO Markku Mäkeläinen and Roberto Neri, the United Kingdom-based former CEO of Utopia’s Music Services division.
Twelve months ago, when Utopia was still turning heads throughout the industry on the back of a frenetic buying spree that saw it rapidly acquire 15 companies, the firm’s global workforce numbered around 1,200. Sources tell Billboard that following the closure of the London and Helsinki tech divisions – and the exit of a number of staff who were already in the process of leaving – the number of employees will be around 440.
Alongside job cuts, Utopia has offloaded three companies this year, the most recent being Absolute, which it acquired in early 2022. Other divestments in 2023 include U.S.-based music database platform ROSTR and United Kingdom-based publisher Sentric, which in April was sold to French music company Believe in a deal worth €47 million ($51 million).
In February, the Zug, Switzerland-based tech company was hit with a lawsuit from U.S. music technology company SourceAudio over a stalled acquisition deal. According to a complaint filed Feb. 13 in Delaware court, lawyers for California-based SourceAudio claim that Utopia owes the tech company over $37 million for failing to complete an agreed acquisition deal. (Utopia estimates that this will be settled in the next coming weeks.)
Following Friday’s announcement of more job losses, a spokesperson for Utopia said the company was “streamlining its organization to increase efficiency.” Despite the consolidation, Utopia will continue to develop its product offering, said the spokesperson, and its physical distribution business “remains a priority area.”
Read the memo in full below.
Dear colleagues,
2023 has been a year of transformation, optimization, and delivery. We have been shifting focus from hyper-growth to sustainable growth and profitability. We have taken the necessary, and sometimes difficult, decisions to get there. While we see the fruits of our actions taken so far – with more products on the market and increased sales traction – we need to further consolidate our research and development (R&D) organization. The main purpose for this consolidation is streamlining our operations to increase focus on delivering our market-ready products to the music industry.
Moving forward, Utopia R&D Stockholm will continue to be our main R&D hub. Through this concentration we will be able to build on the successes delivered through this entity with a leaner and more efficient setup. As part of this consolidation, we will close down two R&D entities, Utopia UK (R&D) Ltd, and Utopia R&D Tech Finland Oy. This will not impact our other 11 employing entities. Our Finnish and UK R&D offices represent a relatively small footprint in Utopia’s overall R&D teams and we have a very strong R&D office in Stockholm that will continue developing, maintaining, and improving our core products.
Our product offering and promise to deliver world class services to our customers also remains. However, we sadly have to say farewell to some very appreciated colleagues, who have greatly contributed to our mission through their hard work, as a result. I want to express my sincere apologies to those affected and would like to thank every one of you for your hard work – you have greatly contributed to our mission. I trust you to bid the employees who are leaving a heartfelt farewell – they deserve all the respect and support we can give. All impacted employees will of course be considered for any future openings.
I’m extremely proud of all the hard work you have put in so far, and continue to deliver. The output from this last six-week cycle was truly amazing – you keep showing impressive dedication, competence, and passion. I’m convinced that we are fully equipped to continue delivering superior services to the music industry through our current customer offerings; Distribution, Radio Monitoring, TrackNClaim, Enhance & Discover, HeartBeat, and Accelerate. While not taken lightly, consolidating our R&D entities is a necessary step to realize our long-term vision of Fair Pay for Every Play as it will enable us to more efficiently deliver new products and improve our existing services.
Mattias
Music streaming giant Spotify is making a new round of cuts to its podcast division following a broad round of layoffs in January and job cuts in October. In a memo to staff Monday morning from Sahar Elhabashi, the head of Spotify’s podcast unit, the company said that it would be reducing its workforce by […]
A group of corporate Amazon workers upset about the company’s environmental impact, recent layoffs and a return-to-office mandate is planning a walkout at the company’s Seattle headquarters Wednesday.
The lunchtime protest comes a week after Amazon’s annual shareholder meeting and a month after a policy took effect requiring workers to return to the office three days per week.
“We respect our employees’ rights to express their opinions,” the company said in a statement.
As of Wednesday morning, more than 1,900 employees had pledged to walk out around the world, with about 900 in Seattle, according to Amazon Employees for Climate Justice, a climate change advocacy group founded by Amazon workers. While some plan to gather at the Amazon Spheres — a four-story structure in downtown Seattle that from the outside looks like three connected glass orbs — others will participate remotely.
Some employees have complained that Amazon has been slow to address its impact on climate change. Amazon, which relies on fossil fuels to power the planes, trucks and vans that ship packages all over the world, has an enormous carbon footprint. Amazon workers have been vocal in criticizing some of the company’s practices.
In an annual statement to investors, Amazon said it aims to deploy 100,000 electric delivery vehicles by 2030 and reach net-zero carbon by 2040. But walkout organizers contend the company must do more and commit to zero emissions by 2030.
“While we all would like to get there tomorrow, for companies like ours who consume a lot of power, and have very substantial transportation, packaging, and physical building assets, it’ll take time to accomplish,” Brad Glasser, an Amazon spokesperson, said in a statement.
Glasser said there has also been a good energy on the company’s South Lake Union campus and at its other urban centers since more employees returned to the office. More than 20,000 workers, however, signed a petition urging Amazon to reconsider the return-to-office mandate.
“As it pertains to the specific topics this group of employees is raising,” Glasser said, “we’ve explained our thinking in different forums over the past few months and will continue to do so.”
In a February memo, Amazon CEO Andy Jassy said the company made its decision to return corporate employees to the office at least three days a week after observing what worked during the pandemic. Among other things, he said senior leadership watched how staff performed and talked to leaders at other companies. He said they concluded employees tended to be more engaged in person and collaborate more easily.
In a note asking Amazon employees to pledge their participation in the walkout, organizers said Amazon “must return autonomy to its teams, who know their employees and customers best, to make the best decision on remote, in-person, or hybrid work, and to its employees to choose a team which enables them to work the way they work best.”
The walkout follows widespread cost-cutting at Amazon, where layoffs have affected workers in advertising, human resources, gaming, stores, devices and Amazon Web Services, the company’s cloud computing division. The company has cut 27,000 jobs since November.
Like other tech companies, including Facebook parent Meta and Google parent Alphabet, Amazon ramped up hiring during the pandemic to meet the demand from homebound Americans who were increasingly shopping online to keep themselves safe from the virus.
Amazon’s workforce, in warehouses and offices, doubled to more than 1.6 million people in about two years. But demand slowed as the worst of the pandemic eased. The company began pausing or canceling its warehouse expansion plans last year.
Amid growing anxiety over the potential for a recession, Amazon in the past few months shut down a subsidiary that’s been selling fabrics for nearly 30 years, shuttered Amazon Care, its hybrid virtual, in-home care service, and closed Amazon Smile, a philanthropic program.
Instagram’s director of music partnerships, Perry Bashkoff, was one of the about 6,000 Meta employees whose roles were eliminated by Meta leadership on Wednesday (May 24). “Yes, I was one of them,” Bashkoff confirmed on Thursday in a LinkedIn post. As Bashkoff noted, he was “part of the team that brought music to the Meta […]
LONDON — Swiss-based tech company Utopia Music is undertaking a fresh round of job cuts, eliminating around 15% of its global workforce, co-founder and interim chief executive Mattias Hjelmstedt said in a memo to staff on Monday.
Hjelmstedt said the cost-trimming measures follow a review of the organization’s business and form part of an ongoing “strategic shift” towards a focus on delivering financial services for labels, publishers and distributors. Billboard understands that around 100 jobs are being cut.
In the staff memo, which has been seen by Billboard, Hjelmstedt says that Utopia’s distribution companies are not affected by the staff cuts. They include Proper Music Group, the United Kingdom’s leading independent physical music distributor, which provides distribution services for 1,000-plus indie labels and service companies, and Cinram Novum, which provides warehouse, fulfilment and distribution services to a range of labels, including UMG, Sony Music Entertainment and [PIAS].
Monday’s announcement is the second round of layoffs to take place at Utopia in the past six months.
In November, the Zug, Switzerland-based tech company cut its workforce by around 20%, representing about 230 jobs. That was followed by a restructuring of Utopia’s business into two separate divisions: Music Services and Royalty Platform in December and the exit of former CEO Markku Mäkeläinen in January. Earlier this month, U.K.-based Roberto Neri announced that he too was leaving his position as CEO of Utopia’s Music Services division to join French music company Believe.
The start of this year has also seen Utopia, whose motto is “Fair pay for every play,” divest two of the 15 companies it acquired over the past two years during a frenetic buying spree. On Feb. 7, Utopia announced that it had sold U.S.-based music database platform ROSTR — which has a directory of artists, managers, booking agents and record labels — back to ROSTR’s founders for an undisclosed sum.
Last month, French music company Believe acquired U.K.-based publisher Sentric, which represents more than four million songs and over 400,000 songwriters in more than 200 territories, from Utopia in a deal worth €47 million ($51 million). Utopia owned Liverpool-based Sentric Music Group — which also has offices in London, Hamburg, New York and Los Angeles – for just over a year before selling it to Believe.
“Today’s market requires that companies that embarked on a hiring spree during ‘hyper growth’ now restructure,” wrote Hjelmstedt. “We are a company that is not afraid to adjust when necessary. That means we take active decisions, however hard they may be, to ensure we can deliver our vision to serve the music industry.”
Hjelmstedt went on to say that adjusting to these strategic changes “has been a big, but necessary undertaking” that has optimized the company’s client offering “and already seen an uplift in customers.”
Referencing recent reports by Scandinavian news outlet Breakit that some Utopia employees had not been paid and the company’s Swedish arm, Utopia R&D Tech, owes 8 million SEK ($770,000) to the Swedish tax authorities, the CEO said “all outstanding tax debts have been cleared” and legacy issues regarding staff payments were “in the process of being cleaned up.”
“We continue to actively work on this process to ensure that we never find ourselves in this position again,” said Hjelmstedt, adding that the company – which had a workforce of around 1,000 employees internationally prior to sale of Sentric – will soon share information on “commercial initiatives, deals, and sales strategies” that will drive future revenue growth.
Read the memo in full here:
Dear Utopians,
Since taking on additional responsibilities as your Executive Chairman, I’ve been committed to sharing the steps we must take for Utopia to become a profitable and sustainable business. The new leadership team and I have had to make some important, and sometimes very tough, decisions as part of this ongoing process. Today I need to share news of that nature.
Together, we’ve very carefully reviewed our organization against our refocused product and commercial roadmaps, and specific needs, and must share the unfortunate news that, as part of this strategic shift, we need to say goodbye to around 15% of our Utopian colleagues. Our distribution companies are not affected by this review.
Thomas and I created Utopia by combining two of our great loves – music and technology – and we’ve built it together with you. That’s why this is the most difficult decision we’ve had to make so far, and I fully appreciate that after these past few months this will be hard to read. If you are one of the affected individuals: Please know that this is in no way based on your individual performance – we hired you because we value you and you are great at what you do – this is about doing what is necessary to secure the future of the company. We’re truly sorry to see you go and feel both humbled and grateful for all the amazing work you have done for Utopia.
It’s been very hard to see how Utopia was treated last year and you already know how I feel about decisions taken that put us in a difficult situation. Additionally, like the rest of the tech industry, we’re facing challenges brought on by changed market conditions. We’ve seen several waves of redundancies from companies large and small – Meta, for example, recently announced its “year of efficiency” to cater to its long-term vision. Today’s market requires that companies that embarked on a hiring spree during “hyper growth” now restructure. The likes of Spotify, Microsoft, and PayPal (and so many others) now need to adapt to the new reality of focused sustainable growth – just like we have to at Utopia. We are a company that is not afraid to adjust when necessary. That means we take active decisions, however hard they may be, to ensure we can deliver our vision to serve the music industry with technology for processing royalties, distributing music, and facilitating Fair Pay for Every Play while reducing complexity for our customers.
Adjusting to these changes has been a big, but necessary undertaking. We’ve sharpened our strategic focus these past three months through targeted sales (ROSTR and Sentric) – bringing in further capital as an additional benefit – and we appointed a new, mature leadership team that’s equipped to move Utopia towards profitability. We have optimized our offering and already seen an uplift in customers – we have strong products on the market that we will continue to improve, a top-of-the-line platform, a world-class distribution arm that represents 98% of UK labels (including all majors), and a plan to first break even and then grow even further, sustainably. The legacy from last year is in the process of being cleaned up. All outstanding tax debts have been cleared, including our financial obligations in Sweden. We continue to actively work on this process to ensure that we never find ourselves in this position again. We’re humbled and grateful to all of you who stepped up to support this large, strategic shift, and have shown patience while we do so.
Soon we will share more information on commercial initiatives, deals, and sales strategies that will drive Utopia’s revenue growth. But for now, let’s allow ourselves time to reflect and give the great people that will unfortunately have to leave us a proper goodbye. Some colleagues will receive difficult news and some will lose teammates and friends, so please be there for them.
I want to express my sincere apologies to everyone affected. Utopia was built to be a high-impact company and we have attracted extremely talented people who we truly appreciate and respect. That’s why this decision is so hard to make. I know you will have a lot of questions, please know that more information on next steps will be provided by the P&C team shortly.
Take care of yourselves and each other,
Mattias
New Warner Music Group (WMG) CEO Robert Kyncl didn’t take much time to make an imprint on the company. On Wednesday (March 29), fewer than three months into Kyncl’s tenure, WMG announced it would lay off 270 employees, or 4% of its workforce.
The layoffs will save the company $22 million in fiscal year 2023 ending Sept. 30, 2023, and “$50 million on an annualized run-rate basis in fiscal year 2024,” according to an SEC filing released Wednesday. That’s equal to 4.2% of WMG’s adjusted earnings before interest, taxes, depreciation and amortization in the fiscal year ended Sept. 30, 2022.
Like many other companies, WMG is becoming more mindful of its resources as the music industry tries to extend an eight-year growth spurt. Prior to announcing the layoffs, WMG said a “financial transformation program,” to roll out in fiscal 2024, is expected to produce annual savings of “$35 million to $40 million once fully implemented,” CFO Eric Levin said on the company’s Feb. 9 earnings call. Universal Music Group’s Motown Records announced layoffs in February as the label was reintegrated under Capitol Music Group. Downtown Music Holdings, Spotify and SoundCloud have also reduced their headcounts in recent months.
WMG had “to make some hard choices in order to evolve” and position the company for “long-term success,” Kyncl wrote in a memo to employees. The cuts were thoughtful and purposeful, he added, not a “blanket cost-cutting exercise.” The layoffs “should be substantially completed by the end of the next fiscal quarter” ending June 30 and will result in cash expenditures of about $46 million by the end of fiscal 2024, according to the filing.
News of WMG’s layoffs didn’t sway investors, however. WMG’s share price rose just 0.6% to $32.63 on Wednesday despite the restructuring’s ability to improve its bottom line. Year-to-date, WMG’s share price has fallen 6.8% while overall stocks have broadly rebounded from a dismal 2022. The S&P 500 is up 4.9% and the tech-heavy Nasdaq composite is up 13.9%. The New York Stock Exchange composite is down 0.4%.
While WMG will reduce headcount in some areas, the company is also building for the future — with an eye on tech. Kyncl, who quickly hired ex-YouTube executive Ariel Bardin for the newly created role of president of technology, said in his memo that WMG would be “reallocating resources towards new skills for artist and songwriter development and new tech initiatives.”
WMG expects to expand its gross margin by 50 to 100 basis points — equal to one-half to one percentage point — in fiscal year 2023. Aside from cost cuts, the nature of the changing music business helps the bottom line. WMG’s margins improve as it sells less of “margin-declining” physical product and “high-margin growing” digital business accounts for a larger share of its total revenue, Levin said at the Deutsche Bank 31st Annual Media, Internet & Telecom Conference on Feb. 28.
“We still see solid margin growth in 2023” despite declining ad-supported streaming revenues, Levin added. “When we see ad-supported start to stabilize and hopefully rebound and grow, it may create an environment for very favorable margins.”
Downtown Music Holdings announced layoffs across the company’s CD Baby, Downtown Music Publishing, Songtrust, and Downtown Music Holdings (DMH) divisions on Wednesday (March 22).
Downtown Music Holdings chief executive Andrew Bergman emailed staff early Wednesday to share the news. Notably, many of the lay offs affect those working in publishing roles. Neither the email, which was obtained by Billboard, nor a company representative would confirm how many jobs were affected.
Bergman also noted in the email that there are also “a number of cost-saving measures… underway” already at Downtown apart from the reduction in team size. The Downtown rep also declined to explain what these measures were.
The email labels this downsizing as “reorganization” that “harmonizes the past several years of strategic investments and divestitures.” As detailed in a recent Billboard profile of the firm, Downtown pivoted from a traditional publishing firm with 145,000 songs in its catalog to selling off all intellectual property in favor of repositioning as a service-focused company instead.
To further bolster their service offerings, in the last few years Downtown acquired CD Baby, FUGA, AdRev, Soundrop and DashGo, and then last September announced the combination many of its B2B services under the name “Downtown Music.” Downtown Music now includes staff from FUGA, Downtown Neighbouring Rights, AdRev and Downtown Music Services artist, label services and publishing administration units.
In October, Billboard reported that Downtown’s CD Baby and Soundrop had laid off 28 employees, citing “economic conditions” and “uncertain times” in a company-wide email from chief people officer Love Whelchel.
“This reorganization harmonizes the past several years of strategic investments and divestitures, better positioning us for the future by aligning our talent, resources, technology and services to meet the evolving needs of the music community while at the same time taking into account this period of economic uncertainty,” said a Downtown rep in a statement.
Read the full email to Downtown Music Holdings’ staff below:
Team,
Today we’re sharing some difficult news with all of you. Downtown’s management team has made the decision to reduce the size of our team in certain areas of the organization, specifically CD Baby, Publishing, Songtrust and DMH. Later this morning, we will be meeting with those employees and informing them that their roles will be impacted.
Along with reducing our team size overall and a number of cost-saving measures we have underway, we hope to be able to offer and place some impacted members of our team in other positions within Downtown that will give them a chance to apply their skills and expertise in new ways.
This reorganization harmonizes the past several years of strategic investments and divestitures, better positioning us for the future by aligning our talent, resources, technology and services to meet the evolving needs of the music community while at the same time taking into account this period of economic uncertainty.
We are committed to continuing to communicate about our plans, our business performance, and the results of these changes and remain accountable to all of you for the improvements and the long-term health and strength of our work at Downtown.
Our management, people, operations, legal and communications teams have made every effort to manage this process with as much thoughtfulness, consideration and empathy as possible. We will be meeting with all of you in the coming days to share more directly, plans for each division and will be ready to answer any questions you may have.
Sincerely,
AB
Additional Reporting by Dan Rys
Amazon plans to eliminate 9,000 more jobs in the next few weeks, CEO Andy Jassy said in a memo to staff on Monday.
The job cuts would mark the second largest round of layoffs in the company’s history, adding to the 18,000 employees the tech giant said it would lay off in January. The company’s workforce doubled during the pandemic, however, in the midst of a hiring surge across almost the entire tech sector.
Tech companies have announced tens of thousands of job cuts this year.
In the memo, Jassy said the second phase of the company’s annual planning process completed this month led to the additional job cuts. He said Amazon will still hire in some strategic areas.
“Some may ask why we didn’t announce these role reductions with the ones we announced a couple months ago. The short answer is that not all of the teams were done with their analyses in the late fall; and rather than rush through these assessments without the appropriate diligence, we chose to share these decisions as we’ve made them so people had the information as soon as possible,” Jassy said.
The job cuts announced Monday will hit profitable areas for the company including its cloud computing unit AWS and its burgeoning advertising business. Twitch, the gaming platform Amazon owns, will also see some layoffs as well as Amazon’s PXT organizations, which handle human resources and other functions.
Prior layoffs had also hit PXT, the company’s stores division, which encompasses its e-commerce business as well as company’s brick-and-mortar stores such as Amazon Fresh and Amazon Go, and other departments such as the one that runs the virtual assistant Alexa.
Earlier this month, the company said it would pause construction on its headquarters building in northern Virginia, though the first phase of that project will open this June with 8,000 employees.
Like other tech companies, including Facebook parent Meta and Google parent Alphabet, Amazon ramped up hiring during the pandemic to meet the demand from homebound Americans that were increasingly buying stuff online to keep themselves safe from the virus.
Amazon’s workforce, in warehouses and offices, doubled to more than 1.6 million people in about two years. But demand slowed as the worst of the pandemic eased. The company began pausing or cancelling its warehouse expansion plans last year.
Amid growing anxiety over the potential for a recession, Amazon in the past few months shut down a subsidiary that’s been selling fabrics for nearly 30 years and shuttered its hybrid virtual, in-home care service Amazon Care among other cost-cutting moves.
Jassy said Monday given the uncertain economy and the “uncertainty that exists in the near future,” the company has chosen to be more streamlined.
He said the teams that will be impacted by the latest round of layoffs are not done making final decisions on which roles will be eliminated. The company plans to finalize those decisions by mid to late April and notify those who will be laid off.
Facebook parent Meta is slashing 10,000 jobs, about as many as the social media company announced late last year in its first round of cuts, as uncertainly about the global economy hits the technology sector particularly hard.
The company announced 11,000 job cuts in November, about 13% of its workforce at the time. In addition to the layoffs, Meta said Tuesday that it would not fill 5,000 open positions.
“This will be tough and there’s no way around that,” said CEO Mark Zuckerberg.
Meta and other tech companies have been hiring aggressively for at least two years and in recent months have begun to let some of those workers go. Hiring in the U.S. is still strong, but layoffs have hit hard in some sectors.
Early last month, Meta posted falling profits and its third consecutive quarter of declining revenue. On the same day, the company said that it would buy back as much as $40 billion of its own stock.
The Menlo Park, company said Tuesday it will reduce the size of its recruiting team and make further cuts in its tech groups in late April, and then its business groups in late May.
Zuckerberg has invested tens of billions of dollars building out its metaverse, its virutal reality concept, and renamed the company Meta, signaling a new focus for Facebook.
“As I’ve talked about efficiency this year, I’ve said that part of our work will involve removing jobs — and that will be in service of both building a leaner, more technical company and improving our business performance to enable our long term vision,” said Zuckerberg.
The biggest tech companies in the U.S. are cutting costs elsewhere, too.
This month, Amazon paused construction on its second headquarters in Virginia following the biggest round of layoffs in the company’s history and its shifting plans around remote work.
Global inflation has remained stubborn and its made for more difficult decisions for both households and businesses in the U.S.
Fast growth companies, including many in the technology sector, are hunkering down for what may be an extended period of adverse economic conditions.
“At this point, I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” Zuckerberg said in a message to employees.
Meta shares rose nearly 7% Tuesday.