Today, Meta’s CEO, Mark Zuckerberg announced that the organization will be letting go of more than 11,000 employees across both Family of Apps and Reality Labs which translates to 13% of the entire organization’s staff. Zuckerberg termed this news as “some of the most difficult changes we’ve made in Meta’s history”.
Zuckerberg further indicated in the letter that he miscalculated, and things did not pan out as he had planned. At the height of the COVID-19 pandemic, online commerce was at its peak, which was misconstrued as a permanent acceleration even after the pandemic.
However, this is not the case because online commerce trends are now back to normal and on top of that competition is more fierce now. In turn, this has greatly impacted Meta’s revenue stream. This prompted the layoffs, as Meta now aims to become “more capital efficient”.
Zuckerberg further added that:
We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our 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.
What does this move mean for the impacted employees? The affected employees will receive an email detailing their termination as well as contact with a representative that will walk them through their concerns. Meta will also provide the affected parties with severance pay, RSU vesting, PTO, Career Services, and Immigration support.
Moving forward, Meta will be extending its hiring freeze through Q1 and shrinking its real estate footprint by taking up desk sharing. Zuckerberg further added that the organization will be taking up more measures to mitigate these issues which will help them cut costs significantly. In hindsight, the company’s revenue outlook is lower than projected.
Last month, we also saw Microsoft pull a similar move, where a handful of employees across multiple divisions were laid off because of the economic purges of the COVID-19 pandemic. We’ve also seen a huge number of employees get laid off at Twitter shortly after Elon Musk’s successful takeover, though there have been reports indicating that Twitter is now recalling some of its former employees to come back to work.
Zuckerberg added that he will share more information highlighting Meta’s next move. Share your thoughts with us in the comment section below.