Mark Zuckerberg, CEO of Meta, confirmed on Wednesday that the company will lay off 11,000 employees, 13% of its workforce worldwide, after disappointing revenue growth. In a blog post published on Wednesday, November 9, 2022, Mark Zuckerberg outlined the failing revenue and the reason for the layoff. Meta had 87,314 employees as of September, and the layoff will commence on Wednesday, November 9, 2022.
“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,” Zuckerberg wrote on his blog.
Also, the company plans to cut discretionary spending and extend its hiring freeze through the first quarter. However, it did not disclose how much it expects to save from the cuts.
In a message to employees, Zuckerberg said, “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 made a mistake, and I apologize for that,” he said.
The company said it will pay severance packages that include 16 weeks of base pay plus two additional weeks for every year of service.
According to the company, impacted employees will also receive their shares that were set to vest on Nov. 15 as well as six months of healthcare coverage.
The CEO of Facebook is among several top U.S. executives who have warned of an impending recession this year.
The company is forecasting $100 billion in expenses for 2023 because of a pricey bet on the metaverse, a shared virtual world. Investors are losing patience with investments that Zuckerberg himself expects to take a decade to pay off.
Moreover, the company is facing stiff competition from TikTok and privacy changes from Apple Inc. (AAPL.O), as well as the crosshairs of regulatory authorities worldwide.
The Meta company’s shares, which have lost more than two-thirds of their value, gained about 3% in premarket trading.