Meta says it is laying off 11,000 of its employees, or 13% of its total workforce, because of a downturn in online commerce, macroeconomics, increased competition, and ads signal loss leading to lower revenue.
"Today I’m sharing some of the most difficult changes we’ve made in Meta’s history," Mark Zuckerberg said in a message to employees. "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."
According to the CEO, while "many people predicted" that COVID-driven movement online and e-commerce acceleration would be permanent, levels have returned to prior trends, amplified by difficult macroeconomics, increased competition, and loss of ads signal that "have caused our revenue to be much lower" than expected.
An apology
Mark Zuckerberg says "got this wrong" and takes responsibility for the situation. Going forward Meta says it will focus on a smaller number of high-priority growth orders like AI and the metaverse. It is also shrinking its real estate footprint and cutting costs.
Employees affected will get 16 weeks severance plus two weeks for every year of service, six months of health insurance, career services, and immigration support.
11,000 employees are to be laid off, 13% of its workforce. Meta is also extending its hiring freeze through Q1.
Facebook has suffered in part from major privacy changes made by Apple in iOS 14 that made tracking users with an IDFA identifier for the purposes of advertising an opt-in feature, something that has drastically neutered the effectiveness of paid-for advertising that companies like Meta rely on for some of their income.
