Meta is getting rid of a substantial part of its workforce as it lays off more than 11,000 employees. This means the corporation formerly known as Facebook is shedding 13 percent of its staff as it seeks to cut costs.
CEO and co-founder Mark Zuckerberg sent a letter to affected employees that reads: "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 percent and let more than 11,000 of our talented employees go," he wrote.
"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," it continued.
The mass layoff follows large increases in costs and expenses as Meta invests in the so-called metaverse, a VR and AR-enabled platform which is a passion project for Mark Zuckerberg. But the R&D for it all is costing the company. In 2022 costs for this reached $9.4 billion so far and Meta expects losses to "grow significantly year-over-year". One area that Meta can and has tried to cut costs is by reducing its payroll, which has led to the large number of redundancies.
"I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I'm especially sorry to those impacted," Zuckerberg said regarding the layoffs. Staff that have been affected will receive 16 weeks of pay plus two additional weeks for every year of service, CNBC reports. Meta will also cover health insurance for six months.
Meta's overall sales have dropped four percent to $27.71 billion in the last quarter while its operating income declined by 46 percent from the previous year to $5.66 billion. Meanwhile, its costs and expenses rose 19 percent year over year in the third quarter to $22.1 billion. Zuckerberg cited an economic downturn and loss of ads revenue for a poorer outlook for the company.
"In this new environment, we need to become more capital efficient. We've shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse," the CEO wrote in his letter to the laid-off staff.