Meta lays off 11,000 employees, around 13 percent of its workforce
Meta is laying off 13 percent of its workforce, or more than 11,000 employees. Meta CEO Mark Zuckerberg admits management mistakes, but believes in a turnaround and recovery.
Meta CEO Mark Zuckerberg announces his company is laying off more than 11,000 employees to cut costs. He cites management mistakes on his part as the reason. He and many others had expected the huge revenue growth during the Corona pandemic to be the new normal and had invested accordingly. This thesis has proven to be wrong.
Instead, headwinds from the economic downturn, less accurate ad tracking and rising competition have increased significantly, he says.
"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 wrote. He takes responsibility for this, Zuckerberg says, but does not go into detail about how.
Meta wants to become more efficient
According to Zuckerberg, Meta needs to get back to being more efficient with its money and has already taken numerous measures recently to do so, including cutting project budgets and restructuring teams.
However, Zuckerberg said these measures alone would not be enough. The layoffs now go hand in hand with a hiring freeze, which - with "minor exceptions" - will apply at least until the first quarter of 2023.
The layoffs will affect all Meta organizations, including the XR division Reality Labs. However, some teams will be affected more than others, Zuckerberg says, without providing details. He announces updates in the coming weeks. Meta also needs to make its infrastructure more efficient and cut costs, Zuckerberg says.
"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," Zuckerberg summarized.
"We are deeply underestimated"
In announcing the layoffs, Zuckerberg also appears to be venting extensive criticism of his management decisions in recent months.
"I believe we are deeply underestimated as a company today," Zuckerberg writes. Billions of people would use Meta's services to connect with each other, and those services would continue to grow.
"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," Zuckerberg writes.
Meta is doing "historically important work," Zuckerberg said, and he is confident that Meta can emerge from the current crisis more efficient, stronger and more resilient.
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