More than 11,000 Meta employees will be let go, or 13% of the company’s workforce, CEO Mark Zuckerberg announced in a message to staff members on Wednesday.
In the letter, Zuckerberg said, “Today I’m sharing some of the most challenging changes we’ve ever made at Meta. “I’ve made the decision to let more than 11,000 of our excellent employees go in order to lower the size of our workforce by around 13%. We are also reducing discretionary spending and extending our hiring freeze through Q1 in order to become a smaller and more effective firm.
The price of Meta shares increased by around 7.7% on Wednesday.
The layoffs come at a difficult time for Meta, the parent company of Facebook, which gave lackluster fourth-quarter profit projections in late October, alarmed investors, and caused its shares to drop over 20%.
The third quarter saw a 19% year-over-year increase in Meta’s costs and expenses, raising them to $22.1 billion, which has investors worried. In the most recent quarter, the company’s overall sales decreased 4% to $27.71 billion, while operating income fell 46% to $5.66 billion.
“I want to accept responsibility for these choices and how we arrived here. I apologize in particular to those who are impacted because I realize this is difficult for everyone. said Zuckerberg.
He claimed that while recruiting will be disproportionately impacted by the company’s plans to hire fewer workers in 2023, Meta is making reductions throughout all of its organizations. With a few exceptions, the business continued its hiring moratorium during the first quarter, according to Zuckerberg.
There is no getting past the fact that this is a sad time. I want to thank everyone who is leaving once more for their contributions to this area, he continued.
Employees who are impacted will receive 16 weeks of salary in addition to two more weeks for each year of service, according to Zuckerberg. For six months, Meta will pay for health insurance.
Meta is making significant investments in the metaverse, a term used to describe a future virtual and augmented reality environment that is still under development. Meta has already lost $9.4 billion in 2022 as a result of this big wager, and the business predicts that losses “will climb considerably year-over-year.”
Zuckerberg stated that Meta intends to “focus our spending on a small handful of high priority development areas” over the course of the following year during a call with analysts as part of its third-quarter earnings release.
According to Zuckerberg, “it means certain teams will grow significantly over the next year, but the majority of other teams will stay steady or decrease.” Overall, we anticipate that by 2023, we will be either about the same size or even a little bit smaller than we are now.
At the end of September, Meta employed more than 87,000 people.
Impact of India
According to insiders with knowledge, Meta India may not be “very significantly” affected by this global news. Over the course of the following week, more information should become accessible, they noted.
About 400 individuals work with Meta in India in a variety of roles, including engineering, product development, sales, and external communications.
A spokesman for Meta India stated in response to ET’s inquiries on the subject that the company would not be “offering data on specific team impact.”
Meta India built its first independent office in Asia in Gurugram in December. The three platforms; Facebook, Instagram, and WhatsApp, are all housed in the new facility, which is 130,000 square feet large.
How will this work?
There is no ideal way to carry out a layoff, but we intend to give you all the pertinent information as soon as we can after which we will do everything in our power to support you.
Everyone will shortly get an email informing them of the implications of this layoff. Each affected employee will then have the chance to speak with someone, get their questions answered, and attend information sessions.
In the US, some specifics are as follows:
Severence: With no cap, we will pay 16 weeks of basic salary plus an additional two weeks for each year of service.
PTO: For any remaining PTO, we’ll pay you.
RSU Vesting: Everyone who is effected will get their vesting on November 15, 2022.
Health insurance: For a period of six months, we’ll pay the cost of healthcare for individuals and their families.
Career services: With an outside vendor, we’ll offer three months of career support that includes early access to unreleased job leads.
Immigration support: If you’re in the country on a visa, I realize this is very challenging. Everyone will have time to arrange and resolve their immigration situation because of the notice period before termination and some visa grace periods. Depending on what you and your family need, our devoted immigration consultants can help guide you.
Support will be comparable outside of the US, and we’ll follow up soon with distinct procedures that take into account regional employment laws.
Given the quantity of access to sensitive information, we decided to block access to the majority of Meta systems for those leaving today. However, email addresses will remain available throughout the day so that everyone can bid farewell.
Some teams will be impacted more than others even though we are making reductions across the whole Family of Apps and Reality Labs organization. Since we want to hire fewer workers next year, recruiting will be adversely affected. Additionally, we are significantly revamping our business teams. This is not a critique of the excellent work that these organizations have accomplished, but rather of what we need moving forward. Over the next few days, the group leaders will set out time to talk about what this means for your team.
What more modifications do we make?
I consider layoffs to be a last choice, thus we made the decision to reduce other cost sources before terminating teammates. Overall, this will result in a significant cultural shift in the way we conduct business. For those who already spend the majority of their time outside of the office, we are migrating to desk sharing as we reduce our real estate footprint. In the upcoming months, we’ll implement more cost-saving adjustments similar to this.
With a few exceptions, we’re also extending our employment moratorium through the first quarter. I’ll be monitoring our company’s financial results, operational effectiveness, and other macroeconomic variables to decide whether and how much recruiting should resume at that time.
In the case of a persistent economic slump, this will enable us to maintain control over our cost structure. It will also set us on the way to a cost structure that is more effective than the one we just described to investors.
I’m currently reviewing our infrastructure spending in great detail. We are working to increase our capacity efficiency as we construct our AI infrastructure. I think we can maintain our infrastructure as a key competitive advantage for Meta while while investing less money.
Fundamentally, we’re making all of these adjustments because our revenue projection is worse than we anticipated at the start of the year and we want to ensure that we’re running efficiently across both Family and Consumer businesses.
How can we proceed?
I understand that this is a trying moment for those of you who are remaining as well. Along with saying farewell to those we have worked closely with, many of you are also filled with apprehension about the future. I want you to know that we are making these choices to ensure the stability of our future.
I firmly believe that our company is currently greatly undervalued. Our services are used by billions of people to connect, and our communities are expanding. One of the most profitable companies ever founded, our main business has enormous future potential. And we’re at the forefront of creating the technologies that will determine how people will connect in the future and what the next computing platform will look like. We carry out crucial historical work. If we put in the necessary effort, I have no doubt.
In the coming weeks, we’ll go into greater detail about how we’ll run our organization more efficiently to accomplish our aims. For the time being, let me once more express my gratitude to those of you who are departing for everything that you have done to forward our cause.