Meta dismisses 11,000 workers globally as company swims in financial hot water
Facebook’s parent company Meta has begun the process of laying off more than 11,000 of its employees globally – the first mass redundancy since the company was founded.
The layoffs account for about 13% of the total headcount, which reached 87,314 at the end of Q3 2022. The company also extended a hiring freeze through Q1.
Meta declined to comment on the cut’s implications in Australia.
However, it is understood US-based employees will receive a series of compensation packages including severance, PTO, RSU vesting, health insurance, career service and immigration support. Those affected in other regions will receive similar support.
In a blog post, Meta’s CEO Mark Zuckerberg attributed the layoffs to overinvestment and his misjudgment of where online commerce was heading.
“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” he said, ” I did too, so I made the decision to significantly increase our investments.”
“Unfortunately, this did not play out the way I expected.”
“I got this wrong, and I take responsibility for that.”
Zuckerberg said he would shift the company’s focus to “high priority growth areas” including AI discovery engine, ads and business platforms, and “long-term vision for the metaverse”.
Whether this indicates a short-term downsize of the metaverse investment is unclear. However, the company has been under the pressure lately from shareholders to dial back on metaverse spending and cut headcount.
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Meta has been in financial hot water this year as the company saw two consecutive drops in revenues year-on-year during Q3 and Q2 – also a first in company history.
The bulk of profit in Q3 comes from its advertising operations, reporting a $27.23 billion (A$41.94 billion) revenue.
The company’s Reality Labs, which produces the VR and AR responsible for manifesting the metaverse, continued its downward streak with a $3.67 billion (A$5.65 billion) loss in Q3.
Meta’s market capitalisation peaked at $1.07 trillion (A$1.66 trillion) in August 2021 but is looking at $269.05 billion (A$418.37 billion) now.
Recently, the tech world has been going through an especially turbulent time, as Twitter dominates headlines with global and local cuts, as brands and agencies rein back ads on the platform.
Snap announced in August its plan to cut about 20% of its employees after a stock price dive this year, while Amazon announced a corporate hiring freeze in a letter to staff this month.
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