The cost cuts are likely to include job reductions due to internal business department reorganizations as opposed to more formal layoffs. The cost cutting is expected to commence over the next few months.
For its second-quarter earnings report in July, the Facebook parent company reported a 22% year-over-year increase in costs and expenses totaling nearly $20.4 billion. The company has been investing heavily in the metaverse in the hopes that yet-to-be developed technology will lead to massive sales.
The company also reported its first-ever revenue decline from a year ago, and predicted during that earnings call that its sales would drop again in its third quarter.
Chief Product Officer Chris Cox previously told employees in a memo that the company is "in serious times here and the headwinds are fierce." He added, "We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets."
Meta is currently facing significant challenges in its business due to several factors. Apple's major privacy update for iOS 14 last year made it harder for Meta to deliver advertisers detailed demographic information about its users, and advertisers are shifting their spend to other platforms. Additionally, the rise of TikTok has affected the company's user growth.