Meta cuts 11,000 jobs | Manufacturing enterprise technology

Facebook’s parent company Meta is laying off 11,000 people, or about 13% of its workforce, as it grapples with falling revenue and broader issues in the tech industry, CEO Mark Zuckerberg said on Wednesday. in a letter to employees.

The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that have been hiring quickly during the pandemic.

Zuckerberg also said he made the decision to hire aggressively, anticipating rapid growth even after the pandemic subsided.

“Unfortunately, it didn’t go as I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to previous trends, but the macroeconomic downturn, increased competition and loss of advertising signal has caused our revenue to drop from what I expected. I was wrong and I take responsibility for it.

Meta, like other social media companies, got a financial boost during the pandemic lockdown era as more people stayed home and scrolled through their phones and computers. But as the shutdowns ended and people started going out again, revenue growth began to falter.

Of particular concern to investors, Meta has poured more than $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts that the Metaverse, an immersive digital universe, will eventually replace smartphones as the primary means of using technology.

Scared investors have sent shares of the company down more than 71% since the start of the year and shares are now trading at levels not seen in 2015.

An economic downturn and a bleak outlook for online advertising – by far Meta’s biggest source of revenue – have also contributed to Meta’s woes. This summer, Meta recorded its first quarterly revenue drop in history, followed by another bigger drop in the fall.

Some of the pain is company-specific, while others relate to broader economic and technological forces.

Twitter last week laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing more than $4 million a day”, but did not provide details of the losses.

Meta and its advertisers are preparing for a possible recession. There’s also the challenge of Apple’s privacy tools, which make it harder for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.

Competition from TikTok is also a growing threat as young people flock to the video-sharing app on Instagram, which Meta also owns.

“We’ve reduced costs across our business, including reducing budgets, reducing benefits and reducing our real estate footprint,” Zuckerberg said. “We are restructuring teams to increase our efficiency. But these measures alone will not bring our expenses in line with our revenue growth, so I have also made the difficult decision to let people go.”

A hiring freeze at the company will be extended through the first quarter of 2023, Zuckerberg said. The company has also reduced its real estate footprint and he said that with so many employees working outside the office, the company will switch to office sharing for those who remain.

More cost reductions at Meta will be rolled out in the coming months, Zuckerberg said.

Zuckerberg told employees on Wednesday they would receive an email notifying them if they were among those terminated. Access to most company systems will be cut off for people who lose their jobs, he said, due to the sensitive nature of this information.

“We keep email addresses active throughout the day so everyone can say goodbye,” Zuckerberg said.

Former employees will receive 16 weeks of base pay, plus an additional two weeks for each year with the company, Zuckerberg said. Health insurance for these employees and their families will continue for six months.

Shares of Meta Platforms Inc. jumped nearly 5% before the opening bell on Wednesday.

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