Facebook's parent company Meta today announced that more than 11,000 employees would be fired to reduce costs following disappointing earnings and a drop in revenue. The broad job cuts follow layoffs at other major tech companies including Elon Musk-owned Twitter and Microsoft.
"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.
Zuckerberg said he anticipated that the surge in e-commerce and web traffic during the Covid lockdown 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 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.
The layoffs would be the first major budget cut 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.
In his statement, Zuckerberg stressed on the need to become more capital efficient and said the company would shift resources to "high priority growth areas" such as its AI discovery engine, ads and business platforms, as well as its metaverse project.
Meta's job reductions 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 chaotic, with many employees finding out 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, parent of rival app Snapchat, is also scaling back, saying in August that it would eliminate 20% of its workforce.