Facebook's parent company Meta on Wednesday said it will pay employees at least four months of severance as it cut 13 per cent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year.
The company has been battling soaring costs and a weak advertising market, and is the latest of tech giants to announce a downsizing.
"We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap," Chief Executive Mark Zuckerberg said in a message to employees.
He also said the company will be paying for all remaining PTO (Paid Time Off) time and cover the cost of healthcare for people and their families for six months.
"We'll provide three months of career support with an external vendor, including early access to unpublished job leads," he said.
"I know this is especially difficult if you're here on a visa. There's a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration specialists to help guide you based on what you and your family need," Zuckerberg said.
Meta in October forecasted a weak holiday quarter and significantly more costs next year, wiping about $67 billion off the company's stock market value, adding to the more than half a trillion dollars in value already lost this year.
The disappointing outlook comes as Meta is contending with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation.
Mark Zuckerberg has said he expects the metaverse investments to take about a decade to bear fruit. In the meantime, he has had to freeze hiring, shutter projects and reorganize teams to trim costs.
"In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today" Zuckerberg said on the last earnings call in late October.
The social media company had in June cut plans to hire engineers by at least 30 per cent, with Zuckerberg warning employees to brace for an economic downturn.
Meta's shareholder Altimeter Capital Management in an open letter to Mark Zuckerberg had previously said the company needs to streamline by cutting jobs and capital expenditure, adding that Meta has lost investor confidence as it ramped up spending and pivoted to the metaverse.
Several technology companies, including Microsoft, Twitter and Snap have cut jobs and scaled back hiring in recent months as global economic growth slows due to higher interest rates, rising inflation and an energy crisis in Europe.