Meta plans to cut approximately 5% of its workforce, or about 3,600 positions, in February.
The layoffs will be based on performance to "weed out the lowest performers faster" as the company says 2025 will be an "intense year."
On 14 January, Meta's shares fell 2.3% following the news, Euronews reported.
Based on its third-quarter earnings report, Meta has about 72,404 employees worldwide, meaning the layoffs could affect about 3,600 workers.
Affected employees will receive "generous severance packages." U.S. employees will be notified on Feb. 10, and non-U.S. employees will be notified at a later date.
Tech giants have stepped up competition in artificial intelligence after Microsoft launched ChatGPT in March 2023. Big investments in data center development have squeezed profit margins.
Although Meta reported strong revenue for the September quarter, its annual net profit growth slowed significantly. Meta expects "significant growth in capital spending through 2025" and "a significant acceleration in infrastructure spending growth next year," according to its earnings release.
The announcement represents the second major round of cuts following a 25% workforce reduction in 2023, which saw approximately 21,000 jobs eliminated.
CEO Mark Zuckerberg has described 2023 as a "year of performance" after a difficult 2022 in which the company's stock plunged more than 60%.
By contrast, 2024 was a profitable year for Meta, with its stock up 67% due to the artificial intelligence boom and a more favorable macroeconomic environment.
Meta's controversial metaverse project continues to impact the company's growth.
In the first nine months of 2024, the Reality Labs segment reported a loss of $12.76 billion.
The company expects "operating losses for 2024 to increase significantly year-over-year due to our ongoing product development efforts and investments to further scale our ecosystem."
Meta will release its fourth-quarter and full-year results on Jan. 29.
Investors will be keeping a close eye on the company's core business, particularly its AI-powered advertising, which contributes over 90% of total revenue.
"We had a good quarter driven by advances in AI across our applications and business," said CEO Mark Zuckerberg.
Last week, Meta announced it would end its third-party fact-checking program and reintroduce political content, including previously restricted topics such as immigration and gender.
The move is seen as an attempt to improve relations with President-elect Donald Trump ahead of his inauguration next week. Previously, Meta Platforms suspended Trump's Facebook and Instagram accounts for two years in 2021 following the January 6 Capitol Hill riot.
Trump had called Facebook "the enemy of the people."
According to CNN, Meta has also donated $1 million to Trump's campaign, along with contributions from Amazon and OpenAI.
CEO Mark Zuckerberg will reportedly attend Trump's inauguration on January 20, along with Tesla CEO Elon Musk and Amazon founder Jeff Bezos. | BGNES
