Meta will cut 11,000 jobs; Zuckerberg says: “I was wrong” | Company

Meta Platforms Inc. CEO Mark Zuckerberg said the company would cut more than 11,000 jobs, calling itself responsible for the first major round of layoffs in the social media giant’s history.

The cuts, equal to around 13% of the workforce, were disclosed in a statement on Wednesday. Zuckerberg then addressed employees, asking them to thank those who lost their jobs, and noting that employees outside of North America will face uncertainty as the company sorts out who is affected, according to people familiar with the matter.

The company, which owns Facebook and Instagram, will also extend its hiring freeze in the first quarter.

“I want to take responsibility for these decisions and how we got here,” Zuckerberg said in the statement that was sent to Meta employees and posted on the company’s website. “I know this is difficult for everyone, and I’m especially sorry for those affected.”

Zuckerberg said that while reductions will occur across the company, the recruiting team will be disproportionately affected and sales teams will be restructured “more substantially.” Meta will also reduce its real estate footprint, revise infrastructure spending and transition some employees to office sharing, with further cost-cutting announcements expected in the coming months.

Meta told employees that decisions about who would be affected were made “at the highest levels of management” and that direct managers were not involved in the eliminations, according to a message to remaining employees seen by Bloomberg. Officials found out which of their reports were to be fired Wednesday morning, according to the message.

A Meta spokesperson declined to comment on the post.

Meta, whose shares had plunged 71% this year through Tuesday, is taking steps to cut costs after several quarters of disappointing profits and falling revenue. The retrenchment, the company’s most drastic since Facebook was founded in 2004, reflects a sharp downturn in the digital advertising market, a faltering economy on the brink of recession and Zuckerberg’s multi-billion dollar investment in a virtual reality speculative push called the metaverse.

Shares were up 5.8% at 3:18 p.m. in New York on Wednesday.

Zuckerberg said in the statement that he anticipated the surge in e-commerce and web traffic since the COVID-19 lockdowns began would be part of a permanent acceleration. “But the macroeconomic slowdown, increased competition and loss of advertising signal caused our revenue to decline from forecast. I was wrong.

Meta joins a wave of tech companies that have announced job cuts in recent weeks or said they plan to halt hiring. Enterprise software maker Salesforce Inc. said on Tuesday it had cut hundreds of workers from sales teams, while Apple Inc., Inc. and Alphabet Inc. all slowed or suspended the hiring. Snap Inc., parent company of rival app Snapchat, is also scaling back, saying in August it would cut 20% of its workforce.

In a particularly chaotic series of layoffs, Twitter cut about half of its workforce last week, with many employees finding they had lost their jobs when they were suddenly cut off from Slack or email.

At Meta, employees will continue to have access to their emails so they can say goodbye to co-workers, despite being cut off from more sensitive corporate systems, Zuckerberg said. U.S. workers who have been laid off will also receive 16 weeks of their base salary as severance pay, plus two weeks for each year they worked for the company. The company also offers six months of healthcare coverage as well as career services and immigration support. The packages will be similar outside the United States, in accordance with local employment laws, the company said.

Zuckerberg had warned employees in late September that Meta intended to drastically cut expenses and restructure teams to adapt to a changing market. The Menlo Park, Calif.-based company, which also owns Messenger and WhatsApp, implemented a hiring freeze, and the CEO said at the time that Meta expected the workforce to be smaller in 2023 than it is this year.

“It’s obviously a different mode than what we’re used to operating in,” Zuckerberg said during a question-and-answer session with employees in September. “For the first 18 years of the business, we basically grew rapidly every year, and then more recently our revenue was flat or slightly down for the first time, so you have to adapt.”

Even with the cuts, Meta continues to expect losses from the Reality Labs division, which houses Metaverse investments, to increase “significantly” year-over-year in 2023, the company said Wednesday. company in a separate regulatory filing. Meta’s costs have come under intense scrutiny after reporting spending last month that exceeded average analyst expectations. The company lowered its total spending forecast for next year to $94 billion to $100 billion, overlapping the analyst average of $96.9 billion.

Zuckerberg has asked investors to be patient as he pours billions into his vision for the next great computing platform after mobile phones: the Metaverse, a collection of digital worlds accessible via virtual and augmented reality devices. . This effort requires intensive investments in equipment and research that may not bear fruit for many years.

Meanwhile, the growth of flagship social network Facebook is stagnating. The company is working to speed it up and continues to add users to the Instagram photo-sharing app, experimenting with a more interest-based algorithm and short videos called Reels.

Now Zuckerberg must pull off his major corporate transitions with fewer staff.

(With help from Nate Lanxon and Kurt Wagner.)

©2022 Bloomberg LP Visit Distributed by Tribune Content Agency, LLC.

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