Mark Zuckerberg developed a taste for cost-cutting. Zuckerberg claimed that his new push for “efficiency” in 2023 was motivated by how much better the company appeared to perform following November’s mass layoffs and other actions, such as closing offices.
Zuckerberg made the remarks during a conference call with Wall Street analysts discussing Meta’s fourth-quarter results.
He continued by stating that the improvement was “unexpected” and that the business had entered a new phase.
“For the first 18 years, we increased it by 20%, 30%, or maybe a lot more every year. And then, obviously, things changed drastically in 2022, when we saw the first year of negative sales in business history, “explained he.
We don’t expect that to continue, but I don’t believe it will necessarily return to the previous state. He continued that it has been a quick phase change to realize that not everything can be treated as hypergrowth.
“We should function somewhat differently since there are many things that many people use and that support a lot of business.” To achieve this, Meta, formerly known as Facebook, is preparing to reduce expenses even more in 2018.
About the 11,000 layoffs last year, Zuckerberg stated that this action “was the beginning of our focus on efficiency and there would be additional moves.”
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Closing And Merging Offices
The shutting and “consolidation” of more offices is one of the different phases. As Meta opted to keep permitting remote work full-time, it cost the business $2.2 billion to terminate some signed leases.
This year, desk sharing will be used as offices in California, Seattle, and New York prepares to close. For instance, the main Facebook office building in San Francisco will be joined by the Instagram office space, which is slated to close this year.
During the call, Susan Li, Meta’s new CFO, predicted that the business would incur an additional $1 billion in lease exit-related costs this year. She also mentioned the possibility of “additional expenditures from restructuring initiatives.”
Employees Are Bracing For More Layoffs
That might result from fresh layoffs. As performance reviews close and Zuckerberg mentions wanting to “flatten” the reporting structure, employees are preparing for another 5% to 10% reduction in staff.
He emphasized that Reality Labs, constructing a metaverse, is not exempt from more layoffs when he remarked on Wednesday that the company is “removing several levels of middle management.”
According to Insider, many managers have already lost their jobs. According to the declaration made on Wednesday, the corporation spent $975 million on layoffs in the fourth quarter.
Being able to execute and accomplish more because of improved operational efficiency is what, in the long run, makes a firm better, according to Zuckerberg.
“Now, since we work in a different setting, it makes logical to put a lot more emphasis than before on efficiency and make sure we can work productively. I believe that because people can accomplish more, the workplace will be a more enjoyable place to be.”
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Canceling Multiple Data Center Projects
Additionally, Meta has been postponing several data center projects, costing the company $1.3 billion. Through 2023, this endeavor will continue.
Li claimed that data centers are subject to the same operational “scrutiny” as applied to other business parts. Despite several tax breaks offered by state governments to host them, the construction and upkeep of data centers is usually a significant investment for any big tech company.
According to Li, Meta is building a brand-new architecture for its data centers, enabling the company to use them for both AI and non-AI purposes and workloads.
The corporation has not disclosed which present data centers are closing or being impacted by the design revisions.
However, the objective is for data centers to be less expensive for the business simply. According to Li, the new center architecture will be easier to construct and more affordable. And we’ll streamline the way we create data centers as a whole.
