Meta Has Announced Layoffs Affecting Over 11000 Employees

Meta Has Announced Layoffs Affecting Over 11000 Employees

The social network company Meta has announced reducing 11,000 jobs and releasing 13% of the employees in its workforce amidst a "cultural shift" in the company. Mark Zuckerberg, CEO of the company, explained this decision was made due to a need to become more "capital efficient" and described the next steps the company will take moving forward.

Meta Reduces its Workforce by 13%

Mark Zuckerberg, CEO of Meta, the company that was previously known as Facebook, announced the company would cut jobs for 13% of its workforce and release more than 11,000 employees in the coming days. The decision has been taken by the company in a move that is described as a "leaner and more efficient" direction, the CEO explained in a blog post.

Zuckerberg said the company had believed the growth fueled by the coronavirus pandemic would be permanent, and that’s why it ramped up its investments. He admitted that he had made a mistake. He added that this also includes the current macroeconomic conditions and increased competition. The aggravating factors of the situation are caused by a huge drop in revenue. Zuckerberg stated:

"I got this wrong, and I take responsibility for that."

Metaverse Commitment Reinforced

As part of the measures taken to increase the efficiency of the company, Zuckerberg stated that the layoffs are part of a "cultural shift" to take the company forward. As an example, he cited that Meta will be sharing desktops amongst employees that are partially employed and will continue the current hiring freeze throughout Q1 2023. Furthermore, he added that more cost-cutting measures will be rolled out in the coming days.

According to Zuckerberg, some company teams will be more affected than others. The metaverse-focused division, Reality Labs, is also mentioned among the affected divisions. However, Zuckerberg remarked that his "long-term vision for the metaverse" will continue to be considered one of the "high-priority growth areas" for the company. The employees affected by these layoffs will enjoy a series of benefits that include severance, career services, and immigration services support for employees working with immigration visas.

The market reacted positively to the announcement, with the price of Meta’s stock gaining almost 5% in premarket trading. Meta’s stock price has plummeted this year, going from USD 331 in January to USD 96 this week. The lukewarm response of the investors regarding the pivot the company is making to the metaverse and the losses of the Reality Labs division, responsible for metaverse developments is noteworthy.