The job cuts at
Meta
Platforms are huge, but not exceptional. Many other companies are moving even more aggressively.
Meta (ticker: META), Facebook’s parent, said this past week that it will cut 10,000 jobs and cancel 5,000 unfilled openings. The cuts come less than six months after the company disclosed 11,000 layoffs in November as CEO Mark Zuckerberg seeks to make the business more efficient.
That isn’t the worst of it: Barron’s took a look at how staffing levels at
S&P 500
companies changed during 2022. Many firms made deeper cuts than the 21,000 positions being eliminated at Facebook.
More companies have disclosed layoffs this year. And fewer openings are available.
In 2022, healthcare provider
Humana
(HUM), for example, cut nearly one-third of its workforce last year, taking it from 96,900 at the end of 2021 to 67,100. Insurance company
American International Group
(AIG) let go about 10,000 people from its workforce of 36,600, representing a 28% cut, while
McDonald
‘s (MCD) reduced its head count by 25% to 150,000 from 200,000.
Meta’s staff increased 20% last year, although most of the 11,000 cuts disclosed in November weren’t included in the year-end figure. The 11,000 reductions, plus the 10,000 layoffs disclosed this past week, would amount to 24% of the roughly 86,000 people working for the company at the end of 2022
Other firms that have cut a significant portion of their workforces last year include
Stanley Black & Decker
(SWK),
MGM Resorts International
(MGM), and
AT&T
(T).
It’s important to note that layoffs aren’t the only reason for changes in employee head count. Spinoffs, or sales of parts of the business, could also lead to significant drop in staff numbers.
When it comes to absolute numbers,
Amazon.com
(AMZN) made the biggest dent. The e-commerce giant removed 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 cut was only 4% of its total workforce.
FedEx (FDX), the human-resource consulting firm
Robert Half International
(RHI),
Ford Motor
(F), Target (TGT), and
Wells Fargo
(WFC) also cut many jobs, but the reductions were relatively small compared to their overall workforces.
January’s jobs data suggest the trend hasn’t 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 increased by a net 517,000 jobs.
The largest increase in job losses came from the professional and business services sector, which includes many tech firms. In recent years, the sector’s layoffs have generally remained around or under 400,000 each month, but in January, the total hit 528,000, second only to the levels at the height of the pandemic.
At the same time, the number of job openings has been falling from its peak last spring, while the number of hires has remained relatively flat. That means openings are disappearing because companies are cutting back on their hiring plans, rather than because posts have been filled.
In January, the number of job openings decreased by 410,000 to about 10.8 million. The largest drop occurred not in professional services, but the construction and accommodation sector, followed by finance and insurance.
Job postings on hiring website Indeed have been declining since early in 2022, but the slide has steepened over the past few months. The number was most recently updated a week ago.
According to the Computing Technology Industry Association, job postings for tech positions across the U.S. decreased by 40,000, or 15%, in February from the previous month. That implies the government job-openings data for February might show more weakness when it is available.
In the current environment, a leaner workforce might be smart for some companies.
Take Meta, whose workforce is more than 10 times as big as it was a decade ago. According to the firm’s annual filings, the staff increased from around 6,300 people in 2013 to more than 86,000 in 2022.
In the beginning, the expansion was matched with strong growth. In 2016, Facebook made nearly $28 billion in revenue with about 17,000 employees, which means roughly $1.6 million for every person on the staff.
By 2022, revenue had risen to $116 billion, but because the workforce was bigger, the figure per worker was $638,000, less than half the amount in 2016.
“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products,” Zuckerberg wrote on Tuesday in a letter announcing the layoffs to his staff, “But last year was a humbling wake-up call. The world economy changed, competitive pressures grew, and our growth slowed considerably.”
Write to Evie Liu at evie.liu@barrons.com
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