Facebook parent company Meta Platforms Inc announced on Wednesday that it would lay off 13% of its workforce, or more than 11,000 workers, as part of a plan to cut costs at the social media platform in the wake of disappointing earnings, rising costs, and a weak ad market. This is one of the most significant tech layoffs of 2022.
The reductions, which are a part of the first significant budget cut since the founding of Facebook in 2004, are due to a sharp decline in digital advertising revenue, a shaky economy on the verge of a recession, and Zuckerberg’s significant investment in the metaverse, a speculative effort in virtual reality.
In order to prepare executives for the changes, Zuckerberg spoke to them on Tuesday. Affected employees will be informed starting this morning. According to the Wall Street Journal, Zuckerberg claimed responsibility for the company’s “missteps” during the executive call.
The layoffs at Meta, which are the first in the 18-year history of the company, come on the heels of Twitter’s last week, when that company lost almost 50% of its workers after being acquired by Elon Musk.
Those layoffs were chaotic, and many workers discovered they were no longer employed when their access to Slack or email was suddenly shut off. Musk claimed that the actions were required to stop the social network’s losses. Later, he asked a few sacked employees to come back.
The parent company of the competing programme Snapchat, Snap Inc, said in August that it will reduce its personnel by 20%. In the face of decades-high inflation and swiftly rising interest rates, the Covid-19 epidemic boom that increased the valuations of IT companies and companies, in general, has collapsed this year.
More than two-thirds of the value of Meta’s shares have been lost, and the company announced that it also intends to reduce discretionary expenditure and extend its hiring freeze through the first quarter.
Late in September, Zuckerberg informed the staff that Meta planned to reduce spending and reorganise teams. A recruiting freeze was established by the Menlo Park, California-based company, which also owns Instagram and WhatsApp. According to the CEO, Meta expects headcount to be lower in 2023 than it is this year.