Image via Dima Solomin
Meta CEO Mark Zuckerberg has announced that Meta will be downsizing by 13% and as a result of that, will be laying off 11,000 employees.
The news of the lay offs comes after Meta lost billions in its Reality Labs division, which works on VR, XR, and the Metaverse for the company.
In a publicly shared statement to Meta employees, Zuckerberg said that the team is 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.”
Zuckerberg stated that the cuts were as a result of misjudgment during the COVID-19 pandemic era. During the pandemic, companies began to allow employees to work remotely and from home. As a result of expansions in e-commerce, revenue went up across many industries. Many CEOs and executives believed that the growth would continue beyond the pandemic, and Zuckerberg had made a decision to increase his investments.
The increases led to more hiring and initiatives, but the end result was not what was anticipated previously.
“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 explained.
Zuckerberg says that Meta needs to become more “capital efficient” and will do this by shifting resources into 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.”
Meta will also cut from the budget, perks, and real estate footprint to accommodate the changes.
Zuckerberg gave details on how the layoff process will go. Meta employees who will be unfortunately laid off will receive emails. If the employee is laid off, Zuckerberg has promised the following for US-based employees:
- Severance: We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap.
- PTO: We’ll pay for all remaining PTO time.
- RSU Vesting: Everyone impacted will receive their November 15, 2022 vesting.
- Health Insurance: We’ll cover the cost of healthcare for people and their families for six months.
- Career Services: We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.
- Immigration Support: I know this is especially difficult if you’re here on a visa. There’s a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration specialists to help guide you based on what you and your family need.
He added that employees outside the US will receive similar support.
“This is a sad moment, and there’s no way around that,” Zuckerberg said. “To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions.
“To those who are staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to make sure our future is strong.
“I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform. 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.
“We’ll share more on how we’ll operate as a streamlined organization to achieve our priorities in the weeks ahead. For now, I’ll say one more time how thankful I am to those of you who are leaving for everything you’ve done to advance our mission.”
Meta is not the first tech company to lay off significant numbers of employees. Twitter, now owned by Elon Musk, has let go 3,700 employees and Microsoft recently laid off over 1,000 across several departments as well.
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