Facebook CEO, Meta Platforms Inc., Mark Zuckerberg, said the company would cut more than 11,000 jobs.
The CEO of Meta Platforms Inc. Facebook’s Mark Zuckerberg said the company will cut more than 11,000 jobs in the first major layoff in the social media giant’s history.
The cuts, equivalent to about 13% of the workforce, were revealed Wednesday in a statement. The company will also extend its hiring freeze in the first quarter.
“I want to take responsibility for these decisions and for how we got here,” Zuckerberg said in a statement sent to Meta employees and posted on the company’s website. “I know this is difficult for everyone and I’m especially sorry to those affected.”
The company said that while the cuts will be company-wide, its hiring team will be disproportionately affected and its business teams will be restructured “more fundamentally.” . Meta will also reduce its real estate footprint, review infrastructure spending and shift some employees to shared desks, with more cost-cutting announcements expected in the coming months. .
Meta, whose stock has fallen 71% this year, is taking steps to offset costs after several quarters of disappointing earnings and falling revenue. The most drastic resignation of the company since its establishment Facebook in 2004, reflecting a sharp slowdown in the digital advertising market, economy is teetering on the brink of recession and Zuckerberg’s multibillion-dollar investment in a speculative virtual reality push known as the metaverse.
Shares have risen about 5% in the New York when the market opens on Wednesday.
Zuckerberg said in the statement that he had predicted that the increase in e-commerce and web traffic since the start of the Covid-19 lockdown would be part of a permanent acceleration. “But macroeconomic downturn, increased competition and advertising signal The loss caused our revenue to be much lower than expected. I was wrong about this.”
Meta is joining a spate of tech companies that have announced job cuts in recent weeks or said they plan to pause hiring. Software production company Sales force Inc. on Tuesday said it was cutting hundreds of workers from its sales teams, while Apple Inc., Amazon. com Inc. and Alphabet Inc. both have slowed or halted hiring. Snap Inc., the parent company of rival app Snapchat, is also downsizing, saying in August it would eliminate 20% of its workforce.
In a particularly tumultuous round of layoffs, Twitter Inc. cut nearly half its workforce last week with many employees discovering they would lose their jobs when suddenly cut off from Slack or email.
At Meta, employees will continue to have access to their email so they can say goodbye to co-workers, even though they’ve been removed from more sensitive corporate systems, Zuckerberg said. U.S. workers who are laid off will also receive 16 weeks of base pay upon severance, plus two weeks for each year they work at the company. The company also offers six months of health care coverage as well as career services and immigration assistance. Packages will be similar outside of the US, consistent with local employment laws, it said.
Zuckerberg warned employees at the end of September that Meta planned to cut costs and restructure team to adapt to a changing market. Menlo Park, the California-based company that also owns Instagram and WhatsApp, implemented the hiring freeze, and the CEO said at the time that Meta expected a smaller headcount in 2023. this year.
“This is clearly a different mode from the one we were used to,” Zuckerberg said in an employee Q&A in September. “In the first 18 years of the company, we basically increased growing rapidly year-on-year, and recently our revenue has been flat and down for the first time ever. So we have to adjust.”
Even with the cuts, Meta continues to expect that losses in its Reality Labs division, which houses aggregate investments, will grow “significantly” year over year into 2023, the company said in a statement. separate regulatory filing on Wednesday.
Zuckerberg asked investors to be patient as he poured billions of dollars into his vision for the next mainframe platform after mobile: the metaverse, a collection of digital worlds accessed through through augmented and virtual reality devices. This endeavor requires an intensive investment in hardware and research that may not pay off years from now.
Meanwhile, growth at leading social network Facebook is stagnating. The company is working to accelerate and continue adding users to the photo-sharing app Instagram, by experimenting with a more interest-based algorithm and short-form videos called Reels.
Now, Zuckerberg has to make his big company transition with fewer people.
