As has been rumoured, today, Meta CEO Mark Zuckerberg confirmed that they will be laying off 11,000 employees, amounting to 13% of the company.
Like Twitter, Zuckerberg blamed this on the company growing at an unsustainable rate during the pandemic, when more people were online, and e-commerce revenue was good.
Unfortunately, unlike what was predicted, the good times did not last. Zuckerberg writes:
“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 got this wrong, and I take responsibility for that.”
This has led to the need to focus on high-priority growth areas (according to Zuckerberg, their AI discovery engine, their ads and business platforms, and their long-term vision for the metaverse) and also to make cuts across the company.
Some areas will, however, be disproportionally affected, with Recruiting (which is much less needed, as Meta is instituting a hiring freeze) and the less successful Business divisions suffering deeper losses.
The lay-offs will be both inside and outside USA.
Meta is also making further cuts, such as selling off some real estate and reviewing its infrastructure spending to find more efficiencies there.
While Meta admitted they have missed their own revenue forecast for this year, Zuckerberg ended on an optimistic note, saying:
“I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform. We do historically important work. I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever.”
