(CTN NEWS) – Mark Zuckerberg, Meta’s CEO, announced Wednesday that the company would lay off 13 percent of its staff, or approximately 11,000 workers.
In the letter, Zuckerberg said, “I am sharing some of the toughest changes Meta has ever faced.” “I will be cutting the size of the team by 13% and letting go of more than 11,000 talented employees.”
Our hiring freeze is also being extended through Q1 to become leaner and more efficient.”Wednesday morning, Meta shares rose about 7.7%.
In late October, Meta, Facebook’s parent company, provided lukewarm guidance for its fourth-quarter earnings, spooking investors and causing its shares to plunge nearly 20%.
Meta’s third-quarter costs and expenses jumped 19% year over year to $22.1 billion, causing investors concern. Overall sales fell 4% to $27.71 billion in the quarter, while operating income fell 46% to $5.66 billion from the previous year.
“I want to take responsibility for these decisions and how we got here. My sincere apologies go out to those who have been affected by this.”
The company plans to reduce staff in 2023, disproportionately affecting recruiting. According to Zuckerberg, the company extended its hiring freeze through the first quarter.
“It’s a sad moment, and that can’t be avoided. I want to thank those leaving again for all they have contributed to this place,” he concluded.
For every year of service, impacted employees will receive two additional weeks of pay, Zuckerberg said. For six months, Meta will cover health insurance.
It invests heavily in the metaverse, a developing digital world that can be accessed with virtual reality headsets or augmented reality glasses. Thus far, Meta has lost $9.4 billion in 2022 due to this hefty bet, and losses are expected to grow significantly.
During Meta’s third-quarter earnings call, Zuckerberg said the company would “focus on a small number of high-priority growth areas” during the coming year.
“Over the next year, some teams will grow meaningfully, but most will stay flat or shrink,” Zuckerberg said. “Ultimately, we expect to be roughly the same size, or even slightly smaller, than we are now by 2023.”
As of September 30, Meta had more than 87,000 employees.
Mark Zuckerberg’s letter to employees is below:
“Today, I’d like to tell you about some of Meta’s most difficult changes. I am letting go of more than 11,000 of our talented employees as part of my attempt to reduce the size of our team by about 13%.
By cutting discretionary spending and extending our hiring freeze through Q1, we will become a leaner and more efficient company.
I want to be held accountable for these decisions and how we got here. My sincere apologies go out to those affected by this tragedy.
How did we get here?
When Covid began, the world rapidly moved online, and e-commerce led to outsized revenue growth. There were many predictions that this acceleration would continue even after the pandemic ended.
I decided to significantly increase our investments because I felt the same way. Sadly, it didn’t work out the way I had hoped.
Our revenue has been much lower than expected due to a macroeconomic downturn, increased competition, and loss of ad signals. My mistake was on my part, and I take responsibility for it.
We must become more capital efficient in this new environment. Our resources have been reallocated to smaller high-priority areas, such as our AI discovery engine, ads and business platforms, and long-term vision for the metaverse.
Our business has scaled back budgets, reduced perks, and shrunk our real estate footprint to cut costs. To increase our efficiency, we are restructuring our teams. However, these measures alone will not bring our expenses in line with our revenue growth, so I have also let people go.
How will this work?
Layoffs are not easy, but we will get all the relevant information to you as soon as possible and support you in whatever way we can.
Each of you will receive an email soon explaining what this layoff means for you. Each affected employee will then have the opportunity to ask questions and attend information sessions.
Here are some details from the US:
- Termination. For every year of service, we will pay 16 weeks of base pay plus two additional weeks.
- PTO. All remaining PTO will be paid.
- RSU vesting. Vesting will be received by everyone affected on November 15, 2022.
- Health insurance. The cost of healthcare for people and their families will be covered for six months.
- Career Services. We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.
Immigration support. It’s especially challenging if you’re on a visa. There is a notice period before termination and some visa grace periods, so everyone has time to make plans and work through their immigration status.
Based on what you and your family need, we have dedicated immigration specialists to assist you.
Our support outside the US will be similar, and we’ll follow up soon with local employment laws-compliant processes.
We removed access to most Meta systems for people leaving today because of the sensitive information they had access to. We’ll keep email addresses active throughout the day so everyone can say goodbye.
Although we are making reductions across the Family of Apps and Reality Labs, some teams will be impacted more than others. Since we plan to hire fewer people next year, recruiting will be disproportionately affected.
Our business teams are also being restructured substantially. These groups’ work does not reflect what we need going forward. In the next few days, the leaders of each group will schedule a time to discuss what this means for your team.
We will lose talented and passionate teammates who have significantly impacted our company and community. Thanks to each of you, Meta has been a success I hope you will continue to do great work at other organizations in the future.
Are there any other changes we should make?
As a last resort, we decided to cut other sources of cost before letting teammatesresult will be a meaningful shift in our culture. We are transitioning to desk sharing for people who spend most of their time outside the office as we shrink our real estate footprint.
In the months ahead, we’ll implement more cost-saving changes.
We’re also extending our hiring freeze through Q1, with a few exceptions. Our business performance, operational efficiency, and other macroeconomic factors will determine whether and how much we should resume hiring at that point.
In the event of a continued economic downturn, this will allow us to control our cost structure. As a result, we will be able to achieve a more efficient cost structure than we outlined recentlyinvestors.
Currently, I’m reviewing our infrastructure spending in depth. While constructing our AI infrastructure, we’re focused on becoming even more efficient. Meta will continue to benefit from its infrastructure, and I believe we can do so while spending less.
In essence, we’re making all these changes because our revenue outlook is lower than expected at the beginning of this year. We want to ensure we operate efficientlyof Apps and Reality Labs.
What should we do next?
situation. I want to thank those leaving once again for all the work you’ve put into this place. Thanks to your work, we wouldn’t be where we are today.is no escaping the sadness of the
I know this is a difficult time for those who are staying. Many of you also feel uncertain about the future as we say goodbye to people we’ve worked closely with. We are making these decisions to ensure our future is bright.
We are undervalued as a company today. We connect billions of people, and our communities continue to grow. With huge potential ahead, our core business is among the most profitable ever built.
In addition, we’re developing the next generation of computing platforms and social connection technologies. Our work is historically significant. We will come out of this downturn stronger and more resilient if we work efficiently.
We’ll share more about how we’ll operate as a streamlined organization in the coming weeks. One more time, I want to thank those who are leaving for all you’ve done to advance our mission.
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