Meta Announces Plans to Lay off 11,000 Employees
- Meta has recorded low revenues in different quarters, and the company believes rising competition plays a role.
- The number of employees at Meta in September was almost double the 48,268 it had at the beginning of the pandemic in March 2020.
- Mark Zuckerberg noted that Meta could be set for a cultural shift in its operation.
Facebook’s parent company, Meta, has announced plans to lay off 11,000 employees. This would be the largest layoffs in the company’s nearly two decades of operation. The plan to reduce its workforce follows an underwhelming performance in its core business and the company’s decision to stake its future on the metaverse. Meta’s involvement in the Metaverse has not proven as successful as the firm would have hoped, and its continued investment in the sector has drawn heavy criticism.
Meta joins other tech companies such as Twitter, Google, and Microsoft in cutting down staff as the tech sector has seen reduced revenue due to rising rates, fears of depression, and high inflation. Meta’s CEO, Mark Zuckerberg, announced the mass layoff in a blog post to employees. He wrote,
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.
After speaking with inside sources, a Wall Street Journal report shared initial rumors of the layoffs over the weekend. However, in his post, Mark reiterated that Meta would extend its hiring freeze, which began early this year, to the first fiscal quarter of the coming year. The job cut will affect several corners of the firm, but Meta’s recruitment team will feel the most impact as the company said it is “planning to hire fewer people next year.”
The Facebook founder said he was to blame for the layoffs, which he said were caused by rising costs and a collapse of its share price. Mark also cited his overinvestment in some sectors and low revenue caused by “the macroeconomic downturn, increased competition, and ads signal loss.”
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. 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. Unfortunately, this did not play out the way I expected,” Mark wrote on Wednesday.
Mark’s blog post follows shocking revelations that Meta revealed in an October 26 report that showed billions of dollars had been lost in its metaverse development division. The metaverse’s R&D division, Reality Labs, reported a $3.67 billion loss for the third quarter.
The company only generated $285 million in revenue during the same quarter, which is the least it had recorded within the given duration. Shareholders in the company were shocked by the news and worried about Meta’s chances in the metaverse.
Zuckerberg noted that in addition to the layoffs, the company plans to carry out other cost-cutting changes in the upcoming months. According to him, Meta is reevaluating its real estate needs and “transitioning to desk sharing for people who already spend the most of their time outside the office.” The Facebook founder concluded that Meta was set for a cultural shift in its operations.