Meta confirms 11,000 layoffs, amounting to 13% of its workforce

Facebook, Instagram and WhatsApp’s mum or dad firm Meta has confirmed an enormous spherical of layoffs, amounting to 13% of its workforce.
“I want to take accountability for these decisions and for how we got here,” CEO and co-founder Mark Zuckerberg wrote in a press release. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
The information comes as firms from throughout the technological spectrum have introduced enormous swathes of redundancies in latest months, with Twitter shedding some half of its 7,500 workforce within the wake of Elon Musk’s arrival on the helm, whereas Stripe final week revealed plans to chop its headcount by 14%. And simply yesterday, Salesforce confirmed it had laid off “hundreds” of employees.
Meta’s spherical of layoffs was broadly rumored and anticipated, however we now know the total extent of the corporate’s plans, and what it will imply for these impacted.
Meta’s present headcount equates to round 87,000 around the globe, that means that 11,000 folks will likely be leaving Meta. According to Zuckerberg, every U.S.-based worker will obtain 16 weeks of severance pay, plus two further weeks for annually of service. So for instance, somebody who has labored at Meta for 4 years will successfully get six months’ pay.
On prime of that, Meta stated that employees may also be paid for all remaining unused time without work and obtain stock-based compensation that was vesting via November 15. Additionally, medical health insurance for workers and their households will likely be supplied for six months.
Outside the U.S., Zuckerberg stated that assist packages “will be similar,” however tailor-made for every market.
Meta-morphic
Meta’s path to the place it finds itself at present is a well-recognized one shared by numerous firms over the previous yr, although the tech titan’s results are amplified considerably by advantage of its measurement.
After changing into one of many few firms ever to hit a trillion-dollar market cap — proper in the midst of the pandemic — the corporate sought a brand new path within the type of the metaverse, rebranding from Facebook to Meta within the course of. While it might be unfair to apportion blame for Meta’s present predicament to this pivot, the corporate has been throwing some huge cash at a undertaking that’s nowhere close to prepared for prime time, with critics arguing that it was shedding focus of its core enterprise in pursuit of one thing that could be a good distance off from occurring, if it occurs in any respect.
Meta’s market cap has plummeted over the previous yr to round $250 billion at present, a determine the corporate final skilled in 2015 when it was on a serious ascendency. The firm posted its first-ever quarterly decline again in June, earlier than confirming it was freezing its hiring plans as a part of broader cost-cutting measures, with its income dip persevering with into the next quarter too.
What’s notable, maybe, is that Zuckerberg barely acknowledges the metaverse in any respect in his open letter, apart from affirming that it’s a “long-term vision” that is still considered one of its “high priority growth areas.”
Certainly, there may be little signal right here that ye olde Meta ship — below Zuckerberg’s stewardship — will likely be altering course any time quickly. He did say redundancies will impression workers at “Family of Apps” (i.e. Facebook, Instagram and WhatsApp) in addition to Reality Labs, the VR and AR unit pushing its metaverse mission, but it surely’s not clear which divisions will likely be hit most: “some teams will be affected more than others,” Zuckerberg said.
In a separate SEC submitting accompanying at present’s announcement, Meta stated that it anticipated Reality Labs’ working losses in 2023 to “grow significantly year-over-year” — an indication, maybe, that Meta is constant full-throttle on the metaverse amid a capex plan for 2023 that’s nonetheless within the vary of $34-$37 billion.
The Great Reset
In reality, a mix of things have contributed to Meta’s decline. Apple’s App Tracking Transparency (ATT) framework, which rolled out final yr, has hit Meta’s promoting income as the corporate predicted it might, with Apple’s personal advertisements enterprise benefiting because of this. And the rise of relative newcomers reminiscent of TikTok has additionally influenced the place advertisers select to spend their cash.
But the elephant within the room right here is the impression of the so-called Great Reset, a phenomenon we’ve seen in numerous different locations the place firms that went in too deep off the again of a pandemic-driven surge in revenues had been introduced again all the way down to Earth with a jolt when the growth subsided. And that is exactly the place Mark Zuckerberg says Meta went improper too, compounded by the broader financial downturn.
“At the start of Covid, the world rapidly moved online and the surge of ecommerce led to outsized revenue growth,” Zuckerberg wrote. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
Other adjustments
Layoffs apart, Meta additionally stated that it’s reviewing its infrastructure spending to optimize its capability effectivity, whereas it’s trying to “shrink its real estate footprint,” which is able to contain extra desk-sharing for many who solely go to an workplace sometimes. Moreover, its present hiring freeze will prolong into early 2023, with solely a “small number of exceptions.”
“I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point,” Zuckerberg wrote. “This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.”