Meta is reducing its workforce by about 13% and laying off over 11,000 employees in the first mass layoffs in the company’s history. Mark Zuckerberg announced the move in an employee message, which Meta shared on its Newsroom. The job cuts will have an impact on every organization in the company, though some will be more affected than others.
In addition to significantly shrinking its workforce, the company is cutting discretionary spending and extending its hiring freeze until the first quarter of 2023. And, because it intends to hire far fewer people next year, the layoffs will have a “disproportionately negative impact” on the recruitment team.
YOU MAY ALSO LIKE: Elizabeth Warren Presses Texas On Crypto Miners’ Energy Use
Zuckerberg has stated that he wishes to accept responsibility for how Meta came to be in this position. Apparently, he made the decision to significantly increase Meta’s investments in the aftermath of the pandemic’s exceptionally large revenue growth, as users spent more on e-commerce.
“Many people predicted that this would be a permanent acceleration that would last even after the pandemic was over,” he explained. His bet did not pay off, and the return of e-commerce to pre-pandemic trends, combined with the economic downturn, resulted in lower-than-expected revenue.
As a result, Meta has chosen to prioritize its growth areas, such as ads and business platforms, as well as its long-term vision for the metaverse.
According to the CEO, employees will soon receive an email informing them of the layoffs. In the United States, affected employees will receive severance pay equal to 16 weeks of base pay plus two additional weeks for each year of service, with no cap. It will also pay for the affected employees and their families’ healthcare for six months.
The company promises to assist them in finding new jobs by utilizing an external vendor who will provide them with access to unpublished job listings, as well as support visa employees with a dedicated team of immigration specialists. Support will be similar in other countries, with minor differences to account for local employment laws.
Given the amount of sensitive information it has access to, Meta claims it has already removed system access for those being let go today. However, their email addresses will remain active throughout the day, so their coworkers won’t have to guess who is still present.
Twitter, on the other hand, reportedly cut off people’s access to their emails even before they knew they were being laid off, and it was unclear who was still working there in the first days after the job cuts began.
Employees were then left waiting for a follow-up email that would determine their fate: if it landed on their work email, they still have a job. If it ended up in their personal email, they were fired.
According to a Bloomberg report, Twitter has now asked some employees to return after realizing that they were laid off by mistake or that their skills are critical in building the features Musk desires.
The Wall Street Journal broke the news of the impending layoffs, noting that Meta’s recruiting and business teams would be particularly hard hit.
For some time, Mark Zuckerberg has hinted at layoffs. During the most recent earnings call, Meta’s CEO stated that the company could become “a slightly smaller organization” by the end of 2023.
He is also said to have directed managers to identify people for layoffs and to have told employees that “really, there are probably a bunch of people at the company who shouldn’t be here.” Within Reality Labs, the company has already halted new hiring and cut some projects.
YOU MAY ALSO LIKE: Sen. Graham Is Disappointed At Lack Of Republican Wins At Midterms
Meta has lost billions of dollars on its metaverse investments, with Reality Labs losing more than $10 billion in 2021. In 2023, the company expects to lose “significantly more.” Facebook’s ad revenue has also suffered as a result of Apple’s changes to app ad tracking capabilities.
Though Meta and Twitter are laying off a large number of employees, they are not the only major tech companies to do so in recent months. Snap also laid off about 20% of its workforce over the summer.
