Meta CEO Mark Zuckerberg has announced he has decided to reduce the size of the company by 13% and let more than 11,000 employees go.
Zuckerberg shared the news publicly in a statement to Meta employees, saying 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."
The cuts, according to Zuckerberg, stemmed from a misjudgment during the COVID-19 pandemic. As companies around the world switched to allowing many of their employees to work from home to keep others healthy, the "surge of e-commerce led to outsized revenue growth." Zuckerberg, and many others, assumed this growth would continue even past the worst of the pandemic, and he made the decision to greatly increase his investments.
This led to more hiring and initiatives, but the plan didn't play out as he hoped.
"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," Zuckerberg said. "I got this wrong, and I take responsibility for that."
To combat this unexpected change, Zuckerberg says Meta needs to become more "capital efficient." It will do this by shifting its 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." It has also made cuts to budgets, perks, and its real estate footprint.
Zuckerberg detailed how the layoff process will go, and Meta employees will receive an e-mail letting them know if they were let go or not. If they are, Zuckerberg has promised the following;
- 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- Career Services: We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.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.
"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's layoffs follow a similar move by Twitter that saw the Elon Musk-led company let go of 3,700 of its employees.
This unfortunate news follows Meta's quarterly earnings that revealed that its Reality Labs division, which covers its VR, XR, and metaverse endeavors, saw $3.7 billion in losses from operations. Reality Labs has lost $9.4 billion so far this year, and that's even up from the $6.9 billion it lost in the same period in 2021.
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Adam Bankhurst is a news writer for IGN. You can follow him on Twitter @AdamBankhurst and on Twitch.
source https://www.ign.com/articles/meta-is-laying-off-more-than-11000-employees-which-accounts-for-13-of-its-workforce