Meta, Facebook’s parent company, announced 11,000 job cuts on Wednesday, the most significant in the tech giant’s history.
The layoffs come as Meta faces a number of challenges in its core business and makes a risky and costly bet on pivoting to the metaverse. It also follows a string of layoffs at other tech firms in recent months as the high-flying sector responds to high inflation, rising interest rates, and fears of a recession.
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in an employee blog post. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”
The job cuts will affect many areas of the company, but Meta’s recruiting team will be particularly hard hit because “we’re planning to hire fewer people next year,” according to Zuckerberg’s post. With few exceptions, he added, a hiring freeze would be extended until the first quarter.
According to a September SEC filing, Meta had over 87,000 employees in September.
Apple’s privacy changes, advertisers’ tightening budgets, and increased competition from newer rivals like TikTok have all harmed Meta’s core ad sales business. Meanwhile, Meta has been spending billions of dollars to create the metaverse, a future version of the internet that is likely to be years away from widespread acceptance.
The company reported its second quarterly revenue decline last month and said its profit was cut in half from the previous year. Meta’s market value has dropped from more than $1 trillion last year to around $250 billion.
“I want to take accountability for these decisions and for how we got here,” Zuckerberg wrote in his post on Wednesday. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
Following the announcement, Meta’s stock rose 5% in trading on Wednesday.
Meta is not the only one suffering from the effects of a market downturn. Inflation, rising interest rates, and other macroeconomic headwinds have resulted in a stunning shift in spending for an industry that only grew more dominant as consumers shifted more of their lives online during the pandemic.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg wrote in a blog post on Wednesday. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. 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,” he added.
Meta’s workforce in September was nearly double that of the 48,268 employees it had at the start of the pandemic in March 2020.
In recent months, a number of technology companies have announced hiring freezes or job cuts, often after experiencing rapid growth during the pandemic. Last week, ride-hailing company Lyft announced layoffs of 13% of its workforce, and payment-processing company Stripe announced layoffs of 14% of its workforce. The same day, e-commerce behemoth Amazon announced a moratorium on corporate hiring.
Also last week, as its new owner, Elon Musk, took the helm of Facebook rival Twitter, the company announced mass layoffs affecting roles across the board.
Aside from the layoffs, Zuckerberg stated that the company will “roll out more cost-cutting changes” in the coming months. Meta, like other tech behemoths, is rethinking its real estate needs and “transitioning to desk sharing for people who already spend most of their time outside the office.”
“Overall,” he stated, “this will add up to a meaningful cultural shift in how we operate.”
