Facebook’s parent company Meta has announced that 11,000 employees will be laid off, representing 13 per cent of its global workforce.
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Meta CEO Mark Zuckerberg announced.
“I’ve decided to reduce the size of our team by about 13 per cent 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.”
It follows mass layoffs from other US tech giants over the last week, including Salesforce and Twitter.
Mr Zuckerberg attributed the redundancies to the “outsized revenue growth” experienced at the beginning of the Covid pandemic.
“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments,” he wrote in a blog post. “Unfortunately, this did not play out the way I expected.”
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces. Meta has worried investors by pouring over $10 billion a year into the metaverse as it shifts its focus away from social media. Mr Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also an a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.
As part of their severance package, workers in the US will receive 16 weeks of base pay plus two extra weeks for every year of service, while those outside the US will receive “similar” compensation.
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