Meta, in a blog post, on Wednesday shared that it will be firing 13% of its workforce around 11,000 employees. The company also shared that it will be extending the hiring freeze through Q1.
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In a direct message to employees, Meta CEO Mark Zuckerberg said that staff reductions will be made across the company’s family of apps and Reality Labs.
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
In a post titled ”Mark Zuckerberg’s message to Meta employees”, the company shared that the decision to downsize came due to a macroeconomic downturn, increased competition and ads signal loss.
The company also shared that it will be paying out 16 weeks of base pay and two additional weeks of pay for every year of service.
Meta will also provide immigration support, health insurance for six months, and career services to employees.
The cuts come at a time Zuckerberg has come under increasing pressure from investors to cut spending. Meta will be focusing on growth areas like AI discovery engine, ads and business platforms, the company shared in the post.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta's woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Mr. Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day," though did not provide details about the losses.
Meta has worried investors by pouring over $10 billion a year into the “metaverse” as it shifts its focus away from social media. CEO Mark Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple's privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
With inputs from AP