Meta Cuts 11,000 Jobs | Manufacturing.net | So Good News
Facebook parent Meta has laid off 11,000 people, about 13% of its workforce, as it grapples with declining revenue and broader tech issues, CEO Mark Zuckerberg said in a letter to employees on Wednesday.
The job cuts come a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. Many jobs have been cut at other tech companies that hired quickly during the pandemic.
Zuckerberg also said he made the decision to hire aggressively, hoping for rapid growth even after the pandemic.
“Unfortunately, this did not work out the way I had hoped,” Zuckerberg said in a prepared statement. “Not only is online commerce back to normal, but the macroeconomic downturn, Due to increased competition and loss of ad signal, it was much lower than we expected. I was wrong, I’m responsible.”
Like other social media companies, Meta has enjoyed financial growth during the pandemic lockdown era as people stay at home and move around on their phones and computers. But after the lockdowns ended, people went back outside, and incomes increased.
Of particular concern to investors is Meta has poured more than $10 billion a year into the “metaverse” as it has shifted its focus away from social media. Zuckerberg predicts that the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Panicked investors have sent the company’s shares down more than 71% since the start of the year, and the stock is now trading at levels last seen in 2015.
A sluggish economy and a bleak outlook for online advertising — by far Meta’s biggest source of revenue — also contributed to Meta’s woes. This summer, Meta posted its first quarterly revenue decline in history. another, Another with a bigger drop in the fall.
Some of the pain is company-specific, while others are tied to broader economic and technological forces.
Last week, Twitter laid off about half of its 7,500 employees as part of a complex overhaul led by Musk. “While the company is losing over $4 million a day, we have no choice but to cut jobs,” he tweeted, without elaborating on the losses.
Meta and its advertisers are bracing for a potential setback. Facebook There’s also the challenge of Apple’s privacy tools, which make it harder for social media platforms like Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also a growing threat as young people flock to the video-sharing app from Instagram, which is also owned by Meta.
“We’ve cut costs across our operations, including scaling back budgets, reducing benefits and reducing our real estate footprint,” Zuckerberg said. “We are reorganizing our teams to improve our efficiency. But this measure alone will not bring our expenses down. In line with our revenue growth, so I have made the difficult decision to let people go.”
The hiring at the company will be extended through the first quarter of 2023, Zuckerberg said. He said the company has cut its real estate footprint and will transition to desk sharing for those who remain because many employees are working out of the office.
Zuckerberg said further cost reductions in Meta will be rolled out in the coming months.
Zuckerberg told employees on Wednesday that they would receive an email notifying them if they were among those denied permission. He said unemployment is due to the sensitive nature of that information for those unemployed in most company systems.
“We actively moderate email addresses throughout the day so we can say hello to everyone,” Zuckerberg said.
Zuckerberg said former employees will receive 16 weeks of base pay plus two additional weeks per year with the company. Health insurance for those employees and their families will continue for six months.
Meta Platforms Inc. Shares jumped nearly 5% ahead of the opening bell on Wednesday.