More than 11,000 Meta employees will be let go, or 13% of the company’s workforce, CEO Mark Zuckerberg announced in a message to staff members on Wednesday. In the letter, Zuckerberg said, “Today I’m sharing some of the most challenging changes we’ve ever made at Meta.
“I’ve made the decision to let more than 11,000 of our excellent employees go in order to lower the size of our workforce by around 13%. We are also reducing discretionary spending and extending our hiring freeze through Q1 in order to become a smaller and more effective firm.
The price of Meta shares increased by around 7.7% on Wednesday. The layoffs come at a difficult time for Meta, the parent company of Facebook, which gave lackluster fourth-quarter profit projections in late October, alarmed investors and caused its shares to drop over 20%.
The third quarter saw a 19% year-over-year increase in Meta’s costs and expenses, raising them to $22.1 billion, which has investors worried. In the most recent quarter, the company’s overall sales decreased by 4% to $27.71 billion, while operating income fell 46% to $5.66 billion.
Facebook Is Laying Off Staffers. These Teams Could Be Affected Most: https://t.co/Dw0TV8L0a2
— Matt Navarra (@MattNavarra) November 9, 2022
“I want to accept responsibility for these choices and how we arrived here. I apologize in particular to those who are impacted because I realize this is difficult for everyone. said Zuckerberg. He claimed that while recruiting will be disproportionately impacted by the company’s plans to hire fewer workers in 2023, Meta is making reductions throughout all of its organizations. With a few exceptions, the business continued its hiring moratorium during the first quarter, according to Zuckerberg.
There is no getting past the fact that this is a sad time. I want to thank everyone who is leaving once more for their contributions to this area, he continued. Employees who are impacted will receive 16 weeks of salary in addition to two more weeks for each year of service, according to Zuckerberg. For six months, Meta will pay for health insurance.
Meta is making significant investments in the metaverse, a term used to describe a future virtual and augmented reality environment that is still under development. Meta has already lost $9.4 billion in 2022 as a result of this big wager, and the business predicts that losses “will climb considerably year-over-year.”
Zuckerberg stated that Meta intends to “focus our spending on a small handful of high-priority development areas” over the course of the following year during a call with analysts as part of its third-quarter earnings release.
“.. Zuckerberg appeared downcast in Tuesday’s meeting and said he was accountable for the company’s missteps, and that his over-optimism about growth had led to overstaffing ..”$META @WSJ https://t.co/2TJVYY2IYz
— Carl Quintanilla (@carlquintanilla) November 9, 2022
According to Zuckerberg, “it means certain teams will grow significantly over the next year, but the majority of other teams will stay steady or decrease.” Overall, we anticipate that by 2023, we will be either about the same size or even a little bit smaller than we are now.
At the end of September, Meta employed more than 87,000 people. The following is Mark Zuckerberg’s letter to the staff: “Today I’m going to talk about some of the hardest modifications we’ve ever undertaken for Meta. I’ve made the decision to let more than 11,000 of our excellent workers go in order to lower the size of our workforce by roughly 13%. We are also reducing discretionary spending and extending our hiring freeze through Q1 in order to become a smaller and more effective firm.
Table of Contents
Where Did We Come From?
When Covid first launched, the world was moving quickly online, and the e-commerce boom caused an astronomical increase in revenue. Many individuals believed that this acceleration would last forever and carry on long after the pandemic was over.
I decided to dramatically boost our investments because I felt the same way. Sadly, things did not turn out the way I had anticipated. Online sales have not only resumed their previous patterns, but our revenue has also fallen far short of what I had anticipated due to the financial slump, increasing competition, and loss of ad signal. I acknowledge that I made a mistake in this.
We need to become more capital efficient in this new climate. More of our resources are now going toward a smaller number of high-priority development sectors, such as our AI discovery engine, our advertising and commercial platforms, and our long-term metaverse strategy.
We have reduced expenses across the board, including budgets, benefits, and the size of our real estate portfolio. Teams are being reorganized to improve productivity. However, these steps won’t be enough to bring our costs into line with our income increase, so I’ve also had to make the difficult choice to let employees go.
How Does This Function?
There is no ideal way to carry out a layoff, but we intend to give you all the pertinent information as soon as we can after which we will do everything in our power to support you. Everyone will shortly get an email informing them of the implications of this layoff. Each affected employee will then have the chance to speak with someone, get their questions answered, and attend information sessions.
In the US, some specifics are as follows: Severance. With no cap, we will pay 16 weeks of basic salary plus an additional two weeks for each year of service. PTO. For any remaining PTO, we’ll pay you.
vesting of RSU. Everyone who is affected will get their vesting on November 15, 2022.
health protection. For a period of six months, we’ll pay the expense of healthcare for individuals and their families.
What More Modifications Do We Make?
I consider layoffs to be the last choice, thus we made the decision to reduce other cost sources before terminating teammates. Overall, this will result in a significant cultural shift in the way we conduct business. For those who already spend the majority of their time outside of the office, we are migrating to desk sharing as we reduce our real estate footprint. In the upcoming months, we’ll implement more cost-saving adjustments similar to this.
With a few exceptions, we’re also extending our employment moratorium through the first quarter. I’ll be monitoring our company’s financial results, operational effectiveness, and other macroeconomic variables to decide whether and how much recruiting should resume at that time. In the case of a persistent economic slump, this will enable us to maintain control over our cost structure. It will also set us on the way to a cost structure that is more effective than the one we just described to investors.
I’m currently reviewing our infrastructure spending in great detail. We are working to increase our capacity efficiency as we construct our AI infrastructure. I think we can maintain our infrastructure as a key competitive advantage for Meta while investing less money.
Fundamentally, we’re making all these adjustments due to two factors: one, we want to ensure that we’re running Reality Labs and Family of Apps efficiently, and second, our revenue estimate is lower than we anticipated at the start of this year.
How Can We Proceed?
There is no getting past the fact that this is a sad time. I want to express my gratitude once more to everyone leaving for their contributions to this area. Without your perseverance, we would not be where we are now, and I appreciate everything you’ve done.
I understand that this is a trying moment for those of you who are remaining as well. Along with saying farewell to those we have worked closely with, many of you are also filled with apprehension about the future. I want you to know that we are making these choices to ensure the stability of our future.