Meta Platforms Inc. said it took a $523 million hit during the first quarter related to the company’s latest round of layoffs, announced in March, that is expected impact 10,000 staffers working across its apps and VR/AR divisions.
Total personnel and severance costs stemming from the layoffs are expected to amount to $1 billion, the company said on Wednesday as part of its quarterly earnings, with $523 million experienced during the first quarter while the remaining charges will be “substantially recorded” by the end of the year.
Restructuring costs, which include charges related to offices and data centers, for the first quarter amounted to $934 million for Meta’s Family of Apps segment — which includes Facebook and Instagram — and $210 million for the Reality Labs segment.
As for total revenue, Meta beat its forecasts for the first quarter, bringing in $28.56 billion to start the year. But net income continued to decline, with Q1 seeing a 24 percent drop to land at $5.71 billion.
The Facebook and Instagram parent company last brought in $32.17 billion in revenue during the fourth quarter, beating Wall Street expectations but representing a 4 percent year-over-year decline. The social giant took a $4.2 billion hit in restructuring costs related to the layoffs of 13 percent of Meta’s workforce, or roughly 11,000 employees, and Meta’s net income dropped 55 percent year-over-year decline to $4.65 billion during the fourth quarter.
At the time, Meta CEO Mark Zuckerberg declared that 2023 would be the “year of efficiency” for the company — a theme echoed again in March, when the company announced its latest round of layoffs.
“We should prepare ourselves for the possibility that this new economic reality will continue for many years. Higher interest rates lead to the economy running leaner, more geopolitical instability leads to more volatility, and increased regulation leads to slower growth and increased costs of innovation,” Zuckerberg said in a memo about the March layoffs. “Given this outlook, we’ll need to operate more efficiently than our previous headcount reduction to ensure success.”
For the current quarter, Meta is forecasting revenue to range between $29.5 billion to $32 billion. Total year expenses for 2023 are expected to hit upwards of $90 billion, with $3 to $5 billion coming from restructuring costs.
During a call with analysts, CFO Susan Li said the company was on track for Reels — Meta’s short-form competitor to TikTok — to become revenue “neutral” by the end of 2023 or early 2024 as the company seeks to ramp up monetization for the offering.
