Mark Zuckerberg, CEO of Meta, said he would lay off more than 11,000 workers and cut the company’s workforce by 13%. Today I’m sharing some of the most difficult changes we’ve made in Meta’s history, Zuckerberg said in the letter. “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.”
Meta, Facebook’s parent company, has been having a tough time of late. The company’s stock price had dropped nearly 20% since late October when it issued tepid guidance for the fourth quarter.
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Meta’s third-quarter expenditures and expenses of $22.1 billion showed a 19% year-over-year increase, causing investors some anxiety. Quarterly revenue was down 4% to $27.71 billion while operating income was down 46% to $5.66 billion for the corporation. “I’d want to own up to my role in making these choices and explain how we arrived here.” “I feel terrible for everyone involved, but particularly for those who will suffer because of this,” Zuckerberg said. He added that meta is cutting down across the board, but hiring will be hit especially hard since the firm isn’t planning to add any new employees in 2023. According to Zuckerberg, the business is keeping the employment freeze in place until the first quarter, with a few exceptions.
Since Meta will employ fewer individuals in 2023, recruitment will be disproportionately impacted. Zuckerberg said that the company’s hiring freeze would last until the end of the first quarter, with a few exceptions. “There is no getting past the fact that this is a terrible time. “To those who are leaving, I want to thank you again for everything you’ve put into this place,” he added.
Meta is significantly investing in the metaverse, which is a yet-to-be-created digital environment accessible through virtual reality and augmented reality headsets. This big Risk has already cost Meta $9.4 billion as of 2022, and the company expects that its losses will “increase significantly from year to year.”
Meta would “focus our spending on a limited handful of high-priority development areas” next year, Zuckerberg told investors during its third-quarter earnings call.
“That means some teams will grow a lot over the next year, but most other teams will stay the same or shrink,” Zuckerberg said. “We plan to conclude 2023 as either nearly the same size or even a somewhat smaller firm.”
As of September, Meta employs around 87,000 people.
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Zuckerberg’s staff letter:
“Today I’m discussing Meta’s hardest adjustments. I’ve cut our staff by 13% and laid off over 11,000 brilliant people. We’re also cutting back on spending we don’t have to and keeping our hiring freeze in place until the end of Q1 to save money and work more efficiently.
I’ll own these choices and how we got here. I’m sorry to anyone affected.
How did we get here?
‘‘E-commerce boomed when COVID started, boosting income. Many projected a persistent acceleration following the outbreak. I did, and therefore I increased our investments greatly. This went wrong. Not only has online shopping gone back to how it was before, but the global economic downturn, more competition, and loss of ad signals have caused our revenue to be much lower than I had expected.’’
‘‘This was my mistake. This new environment requires capital efficiency. We’ve focused on our AI discovery engine, advertisements and business platforms, and metaverse vision. We’ve trimmed budgets, privileges, and real estate. Rearranging teams improves efficiency. I have to fire individuals since these measures won’t match our income increase.’’
What happens?
‘‘There is no ideal way to lay off, but we will bring you all the appropriate information as soon as possible and accompany you through this.
Everyone will get an email explaining this layoff. After that, all impacted employees may ask questions and attend information sessions.’’
Employees affected will get 16 weeks of compensation plus two weeks for each year of service, according to Zuckerberg. Meta will pay for six months of health insurance. If so, Zuckerberg promises;
Severance pay: 16 weeks’ base salary plus two weeks for each year of service; no cap. We’ll cover any leftover PTO.
RSU Vesting: November 15, 2022 vesting for those affected.
Health Insurance: We’ll cover folks’ and their families’ healthcare for six months.
Career Services: An outside vendor will help you with your career for three months and give you early access to unpublished job leads.
Immigration Support: I realize this is hard for visa holders. Everyone will have time to get ready and figure out their immigration situation because there is a notice period before termination and visa grace periods. Our immigration professionals will assist you and your family.
Zuckerberg responded, “This is sad.” I wish to thank those departing for their contributions. I appreciate your efforts.
‘‘I realize this is hard for those remaining. Many of you feel worried about the future as we say goodbye to close collaborators. We’re making these choices to secure our future.
I think our firm is undervalued now. Our communities flourish as billions utilize our services to connect. Our primary business has great potential. We’re leading the way in social connection and computing platform development. We make history. If we work hard, we’ll emerge stronger and more robust from this slump.’’
