Facebook parent company Meta set to lay off more than 11,000 employees

Facebook parent company, Meta, on Wednesday, announced that it will lay off more than 11,000 of its employees.

Meta CEO, Mark Zuckerberg, in a message to his employees on Wednesday said the layoffs will reduce the company’s workforce by about 13 per cent.

He noted that the company also plans to cut discretionary spending and extend its hiring freeze through the first quarter.

“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1,” Mr Zuckerberg said.

“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”

Mr Zuckerberg said the development follows his decision to “significantly increase our investments” at the start of the pandemic. Unfortunately, he added, this did not play out the way he expected.

“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that,” he noted.

On the need to become more capital efficient, Mr Zuckerberg said the company has shifted resources onto a smaller number of high-priority growth areas such as its AI discovery engine, ads and business platforms, and its long-term vision for the metaverse.

“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go,” he said.

He noted that affected employees in the U.S. will receive 16 weeks of severance pay plus two additional weeks for every year of service, with no cap and all remaining paid time off. Employees will get the cost of healthcare for six months and those impacted will receive their November 15 vesting, and provide three months of career support with an external vendor, including early access to unpublished job leads and immigration support for people on visas.

Support

Outside the US, Mr Zuckerberg said support will be similar, and the company will follow up soon with separate processes that take into account local employment laws.

Formerly named Facebook, the company changed its name to focus on the metaverse, a virtual reality world that has yet to be fully developed. Its new strategy has failed to reassure investors, who have also raised concerns about Meta’s rising costs and expenses.

Competition from TikTok is also a growing threat to the company as younger people flock to the video-sharing app over Instagram, which Meta also owns.

In September, Meta said it had 87,314 employees as of the third quarter of 2022, an increase of 28 per cent year-over-year.

Last month, the company posted its second-quarter revenue decline and said that its profit was cut in half from the prior year.

Valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion, according to CNN.

The new development comes barely a week after Twitter Inc laid off half its workforce as advertisers pulled spending amid concerns about content moderation.