After Twitter, now owned by billionaire Elon Musk removed a bulk of its employees, Facebook‘s parent company is firing workers on a massive scale: 11,000 in all or 13% of its strength. Chief Executive of Meta Mark Zuckerberg said in a blog post today, “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,” Zuckerberg said.
Taking responsibility for the decisions, Mark Zuckerberg apologised to Meta employees: “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,” he said.
Zuckerberg said he had anticipated that the surge in e-commerce and web traffic during the lockdown necessitated by the Chinese flu or Covid would be part of a permanent acceleration. “But the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than expected. I got this wrong.”
As per the severance deal, Meta employees will get 16 weeks of base pay along with two additional weeks for every year of service. Employees will get the cost of healthcare for six months, the company said.
This mass firing is the first major cost-cutting exercise in Facebook since the company was founded in 2004. The reductions reflect a sharp slowdown in digital advertising revenue, an economy wobbling on the brink of recession and Mark Zuckerberg’s heavy investment in a speculative virtual-reality push called the metaverse.
Zuckerberg stressed on the need to become more capital-efficient, saying that the company would move resources to “high priority growth areas” such as its AI discovery engine, ads and business platforms, as well as its metaverse project.
The layoffs in Meta follow cutbacks at Twitter last week, which saw that company cut roughly 50% of its workforce following its sale to Elon Musk. Those layoffs were allegedly chaotic, with many employees finding out that they had lost their jobs when they were suddenly cut off from Slack or email. Musk said the moves were necessary to stem losses at the social network. He later asked some fired workers to return.
Snap, the parent of rival app Snapchat, is scaling down too, saying in August that it would eliminate 20% of its workforce.