Mark Zuckerberg, head of Facebook’s parent company Meta, revealed that the company will lay off 11,000 people today, or about 13% of its current global workforce. Affected staff will be notified today.
The company released its third-quarter results last month, with revenue down $4 billion year-over-year to $27.7 billion, and near-zero user growth. in its main family of apps, Facebook, Instagram and WhatsApp.
While layoffs have taken place in the tech sector over the past few months, layoffs of this magnitude by one of the biggest tech companies are a sign of how tough the situation is. So far, Meta has implemented targeted hiring freezes, but has not announced any layoffs.
Meta had 87,314 employees worldwide as of September 30, 2022, up 28% year-over-year
“Today, I’m sharing with you some of the most difficult changes we’ve made in Meta’s history,” Zuckeberg said in a letter to employees, also posted on Meta’s website. “I have decided to reduce the size of our team by approximately 13% and let go of over 11,000 of our talented employees. We are also taking a number of additional steps to become a leaner and more efficient company by reducing spending and extending our hiring freeze through the first quarter.”
Meta had 87,314 employees worldwide as of September 30, 2022, up 28% year-over-year. During the third quarter earnings update, Meta said it expects its workforce at the end of 2023 to be approximately in line with its third quarter 2022 levels. The business has begun to freeze hiring in some parts of the business, but continued to hire in others, particularly in the areas of AI and VR/AR, aka Meta’s Reality Labs.
Meta immediately cuts access to work tools to the personnel concerned. “We have made the decision to remove access to most Meta systems for people leaving today, given the amount of access to sensitive information. But we are keeping email addresses active throughout the day for everyone to say goodbye,” Zuckerberg wrote.
“Unfortunately, it didn’t go as I had planned”
Mr Zuckerberg said he made some wrong bets based on what happened during the COVID-19 pandemic when everyone went digital. “At the onset of Covid, the world quickly went online and the surge in e-commerce led to outsized revenue growth. Many people predicted that this would be a permanent acceleration that would continue even after the end of the pandemic. I did too, and so I made the decision to significantly increase our investments,” he wrote.
“Unfortunately, it didn’t go the way I expected. Not only did online commerce revert to earlier trends, but the macroeconomic downturn, increased competition and loss of advertising signal meant that our income has been much lower than I had expected. I was wrong, and I take responsibility for it.”
Zuckerberg said the cuts will affect the family of apps (Facebook, Instagram, WhatsApp) and Reality Labs, but groups like recruitment will be “disproportionately affected as we plan to hire fewer people the next year.”
Mr Zuckerberg said the layoffs were a ‘last resort’
He added: “We are also restructuring our commercial teams in a major way. This is not a reflection of the great work done by these groups, but of what we need for the future. The leaders of each group will take the time to discuss what this means for your team over the next two days,” Zuckerberg said.
Mr Zuckerberg said the layoffs were a “last resort” and made other changes including reducing the real estate footprint and sharing office space for those who often work from home or elsewhere. Further cost reduction measures are planned in the coming months.
Meta will also extend its hiring freeze through the first quarter, with a “small number of exceptions.”
“We’re making all of these changes for two reasons: our revenue outlook is lower than we anticipated at the start of the year, and we want to make sure we’re operating efficiently across both the app family and the Reality Labs,” Zuckerberg said.
Source: “ZDNet.com”