Meta says it will lay off more than 11,000 staff as Mark Zuckerberg claims the company is 'deeply underestimated'
- Meta on Wednesday said it planned to lay off more than 11,000 employees, or 13% of its workforce.
- Its founder and CEO, Mark Zuckerberg, said in a staff memo that the layoffs were a "last resort."
Meta on Wednesday said it planned to cut more than 11,000 employees, or about 13% of its workforce, with CEO Mark Zuckerberg acknowledging he'd mistimed big investments in the company.
"I want to take accountability for these decisions and for how we got here," Zuckerberg said in a blog post. "I know this is tough for everyone, and I'm especially sorry to those impacted."
Zuckerberg said that Meta was reducing headcount across the company — including Reality Labs, the division housing its metaverse projects — but that some teams, including its recruiting team, would be affected more than others.
"At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth," he wrote. "Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended.
"I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected."
He also said, however, that he believed Meta was "deeply underestimated as a company today," adding: "We do historically important work. I'm confident that if we work efficiently, we'll come out of this downturn stronger and more resilient than ever."
Meta's stock was up about 4%, to $100.24, in premarket trading soon after the announcement.
Zuckerberg said that in addition to layoffs, the company was also cutting discretionary spending and extending its hiring freeze through the first quarter of 2023. "I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go," he said.
Meta had 87,314 employees on September 30, according to its third-quarter earnings report. That represented growth of 28% year-over-year, the report said.
Zuckerberg on Wednesday said laid-off workers lost access to most Meta systems "given the amount of access to sensitive information" but would still have access to their emails "so everyone can say farewell."
Meta employees had for months expected layoffs, and some vice presidents and directors were told Tuesday of specific plans for the cuts.
Staff, and Zuckerberg, saw layoffs on the horizon
The layoffs mark the first such action by Meta, which rebranded last year from Facebook. Zuckerberg had hinted in recent months that a downsizing was coming.
The first hint came in late April, when he told investors on a quarterly earnings call that more attrition would make Meta "a better company." A few days later, the company imposed a broad hiring freeze.
A reorganization was underway before the layoffs announcement Wednesday, with certain divisons being slashed and managers being asked to try to find other jobs in the company or leave — changes employees termed "quiet layoffs" — Insider reported. Workers were being told to give "200%" even as they were warned to prepare for layoffs that could affect 10% to 20% of staff members.
Meta has shed more than 70% of its market value since Zuckerberg announced in 2021 that Facebook was rebranding as Meta in a risky pivot toward the metaverse — a world where people connect in a digital universe using virtual- and augmented-reality devices. In October, Meta shares plummeted 24% the day after after it reported disappointing third-quarter earnings.
Still, Zuckerberg doubled down, projecting that losses from Reality Labs, the division responsible for everything metaverse, would continue to lose even more money over the next year. So far this year, Reality Labs has reported losses of $9 billion, including nearly $4 billion in the third quarter. The division lost $10 billion in 2021.
Zuckerberg said affected US employees would get 16 weeks of severance plus an extra two weeks for every year of service. Those employees will also get healthcare coverage for them and their families for six months, three months of career support with an external vendor, and immigration support, he added. Affected employees would also still get their restricted stock unit vesting on November 15, he said.
Meta is one of several companies that have initiated large-scale layoffs in recent months. Earlier this year, Snap announced it was laying off 20% of its workers after aggressively hiring during the coronavirus pandemic only to see the advertising market slow amid fears of a recession and the ongoing impact of Russia's invasion of Ukraine. Elon Musk just last week cut Twitter in half, unceremoniously laying off so many people that some affected by job cuts are now being asked by colleagues still at the company to return.
Are you a Facebook/Meta employee or someone else with insight to share? Contact Kali Hays at email@example.com, on secure messaging app Signal at 949-280-0267, or through Twitter DM at @hayskali. Reach out using a non-work device.
Contact Grace Kay at firstname.lastname@example.org.
- From usernames to secret codes for locked chats, here are the upcoming WhatsApp features
- Coal sector PSUs poised to cross ₹21,030 crore Capex target for 2023-24
- Stock markets snap six-day rally; Sensex slumps over 400 points
- From Lathmar Holi to Jallikattu: India's most unusual festivals
- Orient Technologies files draft papers with Sebi to mop-up funds via IPO