By Murray Stassen
Published November 9, 2022
Facebook parent company Meta is cutting around 13% of its global workforce.
The reduction in staff, which totals 11,000 layoffs, was announced by founder and CEO Mark Zuckerberg in a letter published on Wednesday (November 9). He added that the tech giant will be “cutting discretionary spending and extending our hiring freeze through Q1”.
Writing to employees, Zuckerberg called the action “some of the most difficult changes we’ve made in Meta’s history”.
Said Zuckerberg: “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”
Zuckerberg writes that Meta’s current challenges started with Covid when the “world rapidly moved online and the surge of e-commerce led to outsized revenue growth”.
He added that predictions that this trend would continue after the pandemic ended, led to his decision to increase the company’s investments.
“Unfortunately, this did not play out the way I expected,” he added. “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.”
Zuckerberg explains further that in an effort “to become more capital efficient” in what he calls this “new environment”, Meta has diverted its resources to “a smaller number of high priority growth areas”
Those areas include Meta’s AI discovery engine, its ads and business platforms, and what Zuckerberg says is the company’s “long-term vision for the metaverse”.
Meta’s multi-billion dollar bet on the metaverse has hit a sour note with some investors, with the company’s share price taking a beating over the past 12 months.
The firm’s stock also dropped after the company’s Q3 earnings results in October when Meta reported it’s revenue had decreased 4% year-over-year.
“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,” added Zuckerberg in his memo. “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 told staff on Wednesday that “there is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this”.
He added: “I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months.”
Read more: MusicBusinessWorldwide.com
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