By John Ikani
Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees on Wednesday.
The job cuts come as Meta confronts a range of challenges to its core business and makes an uncertain and costly bet on pivoting to the metaverse.
It also comes amid a spate of layoffs at other tech firms in recent months including Elon Musk-owned Twitter and Microsoft as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession.
Snap, parent of rival app Snapchat, is also scaling back, saying in August that it would eliminate 20% of its workforce.
“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,” Meta’s Chief Executive Mark Zuckerberg said in a blog post today.
“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 added.
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.
Meta is heavily investing in the metaverse, which generally refers to a yet-to-be developed digital world that can be accessed by virtual reality and augmented reality headsets. This hefty bet has cost Meta $9.4 billion so far in 2022, and the company anticipates that losses “will grow significantly year-over-year.”
The downsizing which is the most significant since the founding of Facebook in 2004, was also catalysed by a sharp slowdown in digital advertising revenue.
In June, Meta said it planned to cut its hiring of engineers by at least 30% this year.
In July, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in October.
In September, Meta announced a pause in hiring and a subsequent restructuring with Mark Zuckerberg hinting at further downsizing, adding “there are probably a bunch of people at the company who shouldn’t be here.”
“I had hoped the economy would have more clearly stabilised by now, but from what we’re seeing it doesn’t yet seem like it has, so we want to plan somewhat conservatively,” Zuckerberg told employees during the Q&A session.
The Facebook parent company reported over 87,000 employees at the end of September.
As severance, employees would get 16 weeks of base pay along with two additional weeks for every year of service. Employees will get cost of healthcare for six months, the company said.
