Meta CEO Mark Zuckerberg has confirmed to fire 13% staff globally amid faltering revenue and macro-economic uncertainty.
New Delhi: Mark Zuckerberg confirmed on Wednesday to lay off 13% of its staff which is around 11,000 globally. He wrote down a letter for Meta employees informing about the lay off process starting from Wednesday.
“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.” Mark Zuckerberg said in a blog post.
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He said he’d predicted the surge in e-commerce that eventually led to outsized revenue growth. “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.”
He further said that in the new environment it need to become more capital efficient. Meta has shifted more of our resources onto a smaller number of high priority growth areas – like 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.” Zuckerberg said in the blog post.
However, he announced through the letter to give employees 16 weeks of base pay plus two additional weeks for every year of service, with no cap. The company will bear the cost the healthcare for people and their families for six months. Moreover, it will provide three months of career support with an external vendor, including early access to unpublished job leads.
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He further said in the blog to implement more cost cutting ways to rein in other sources of costs including shrinking real estate footprint, meaning transitioning to desk sharing for people who already spend most of their outside the office.
“We’re also extending our hiring freeze through Q1 with a small number of exceptions. I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point. This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.
I’m currently in the middle of a thorough review of our infrastructure spending. As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.
Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently across both Family of Apps and Reality Labs.”
