CEM REPORT, ICT | Meta has revealed that it will be laying off 13% of its workforce representing 11,000 workers.
The company will also cut discretionary spending and extend its hiring freeze through the first quarter of 2023.
Meta CEO Marck Zuckerberg in a message shared in the Meta Newsroom added that aside from the layoffs, the company is taking other measures to cut costs.
“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. 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.
“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 for those impacted,”
He explained that the decision though a hard one was necessary as the company had over-invested at the start of COVID-19 and now making efforts toward correction.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. 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.
“In this new environment, we need to become more capital efficient. We’ve shifted more of our resources onto a smaller number of high-priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse. We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
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While noting that the layoffs came as a last resort, Zuckerberg said the company has also decided to rein in other sources of the cost before letting teammates go. Overall, he said this will add up to a meaningful cultural shift in how the company operates.