The job cuts at
Meta
The platforms are huge, but not exceptional. Many other companies are acting even more aggressively.
Meta (ticker: META), the parent company of Facebook, said last week that it would cut 10,000 jobs and cancel 5,000 vacancies. The cuts come less than six months after the company announced 11,000 layoffs in November as CEO Mark Zuckerberg seeks to make the company more efficient.
It’s not the worst: Barrons examined how staffing levels at
S&P500
companies have changed in 2022. Many companies have made cuts bigger than the 21,000 jobs cut at Facebook.
More companies have announced layoffs this year. And fewer openings are available.
In 2022, the healthcare provider
humane
(HUM), for example, cut its workforce by almost a third last year, dropping it from 96,900 at the end of 2021 to 67,100. Insurance company
American international group
(AIG) laid off around 10,000 of its 36,600 workforce, a reduction of 28%, while
mcdonalds
‘s (MCD) reduced its workforce by 25%, from 200,000 to 150,000.
Meta staff grew 20% last year, although most of the 11,000 cuts disclosed in November were not included in the year-end figure. The 11,000 cuts, plus the 10,000 layoffs announced last week, would represent 24% of the roughly 86,000 people working for the company at the end of 2022.
Other companies that cut a significant portion of their workforce last year include
Stanley Black & Decker
(SWK),
MGM Resorts International
(MGM) and
AT&T
(T).
It is important to note that layoffs are not the only reason for changes in the number of employees. Spinoffs, or the sale of parts of the business, could also result in a significant drop in the workforce.
As for absolute numbers,
Amazon.co.uk
(AMZN) made the biggest dent. The e-commerce giant cut 67,000 people from its payroll in 2022, the most among S&P 500 companies. But because the company employed more than 1.6 million people at the end of 2021, the reduction was only 4% of its total workforce.
FedEx (FDX), the human resources consulting firm
Robert Half International
(RHI),
Ford engine
(F), Target (TGT) and
Wells Fargo
(WFC) also cut many jobs, but the cuts were relatively small compared to their overall workforce.
January jobs data suggests the trend has not abated. According to the Bureau of Labor Statistics, the number of job losses jumped 240,000 from the previous month to 1.7 million, the highest level since 2020, although nonfarm payrolls rose 517 000 net jobs.
The biggest increase in job losses came from the professional and business services sector, which includes many technology companies. In recent years, layoffs in the sector have generally remained around or below 400,000 each month, but in January the total reached 528,000, just below levels at the height of the pandemic.
At the same time, the number of job vacancies has fallen since its peak last spring, while the number of hires has remained relatively stable. This means that openings are disappearing because companies are reducing their hiring plans, rather than because positions have been filled.
In January, the number of job vacancies fell by 410,000 to around 10.8 million. The largest decline occurred not in professional services, but in construction and accommodation, followed by finance and insurance.
Job postings on Indeed’s job site have been declining since the start of 2022, but the decline has steepened in recent months. The number was last updated a week ago.
According to the Computing Technology Industry Association, job postings for technology positions in the United States fell by 40,000, or 15%, in February from the previous month. This implies that government job vacancies data for February could show more weakness when it becomes available.
In today’s environment, a lean workforce could be smart for some businesses.
Take Meta, whose workforce is more than 10 times larger than ten years ago. According to the company’s annual statements, the workforce has grown from around 6,300 people in 2013 to more than 86,000 in 2022.
At first, the expansion was accompanied by strong growth. In 2016, Facebook made nearly $28 billion in revenue with about 17,000 employees, which means about $1.6 million for each staff member.
By 2022, revenue had grown to $116 billion, but because the workforce was larger, the figure per worker was $638,000, less than half the amount in 2016.
“For most of our history, we have experienced rapid revenue growth year over year and had the resources to invest in many new products,” Zuckerberg wrote Tuesday in a letter announcing the layoffs to his staff, “ But the past year has been a wake-up call.The global economy has changed, competitive pressures have increased, and our growth has slowed significantly.
Write to Evie Liu at evie.liu@barrons.com
