Facebook parent company Meta is cutting around 13% of its global workforce.
The reduction in staff, which totals 11,000 layoffs, was announced by founder and CEO Mark Zuckerberg in a letter published on Wednesday (November 9). He added that the tech giant will be “cutting discretionary spending and extending our hiring freeze through Q1”.
Writing to employees, Zuckerberg called the action “some of the most difficult changes we’ve made in Meta’s history”.
Said Zuckerberg: “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”
Zuckerberg writes that Meta’s current challenges started with Covid when the “world rapidly moved online and the surge of e-commerce led to outsized revenue growth”.
He added that predictions that this trend would continue after the pandemic ended, led to his decision to increase the company’s investments.
“Unfortunately, this did not play out the way I expected,” he added. “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 explains further that in an effort “to become more capital efficient” in what he calls this “new environment”, Meta has diverted its resources to “a smaller number of high priority growth areas”
Those areas include Meta’s AI discovery engine, its ads and business platforms, and what Zuckerberg says is the company’s “long-term vision for the metaverse”.
Meta’s multi-billion dollar bet on the metaverse has hit a sour note with some investors, with the company’s share price taking a beating over the past 12 months.
The firm’s stock also dropped after the company’s Q3 earnings results in October when Meta reported it’s revenue had decreased 4% year-over-year.
“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,” added Zuckerberg in his memo. “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.”
Zuckerberg told staff on Wednesday that “there is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this”.
He added: “I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months.”
Meta is the latest firm in the tech sector to make significant cuts to its workforce.
Crunchbase estimates that as of late October, over 52,000 US tech sector workers have lost their jobs so far in 2022.
In August, social media firm Snapchat revealed that it is planning to lay off approximately 20% of its employees.
Also in August, SoundCloud started the process of reducing its global workforce by approximately 20%.
In July, ByteDance-owned short-form video streaming platform TikTok was reported to have started laying off some of its staff in the US, and preparing to cut workers in Europe.
You can read Mark Zuckerberg’s letter in full below:
Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are 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.
I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.
How did we get here?
At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. 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. 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.
In this new environment, we need to become more capital efficient. 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.
How will this work?
There is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this.
Everyone will get an email soon letting you know what this layoff means for you. After that, every affected employee will have the opportunity to speak with someone to get their questions answered and join information sessions.
Some of the details in the US include:
- 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.
Outside the US, support will be similar, and we’ll follow up soon with separate processes that take into account local employment laws.
We made the decision to remove access to most Meta systems for people leaving today given the amount of access to sensitive information. But we’re keeping email addresses active throughout the day so everyone can say farewell.
While we’re making reductions in every organization across both Family of Apps and Reality Labs, some teams will be affected more than others. Recruiting will be disproportionately affected since we’re planning to hire fewer people next year. We’re also restructuring our business teams more substantially. This is not a reflection of the great work these groups have done, but what we need going forward. The leaders of each group will schedule time to discuss what this means for your team over the next couple of days.
The teammates who will be leaving us are talented and passionate, and have made an important impact on our company and community. Each of you have helped make Meta a success, and I’m grateful for it. I’m sure you’ll go on to do great work at other places.
What other changes are we making?
I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months.
We’re also extending our hiring freeze through Q1 with a small number of exceptions. I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point. This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.
I’m currently in the middle of a thorough review of our infrastructure spending. As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.
Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently across both Family of Apps and Reality Labs.
How do we move forward?
This is a sad moment, and there’s no way around that. 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.
MarkMusic Business Worldwide
