Facebook parent company Meta on Wednesday laid off thousands of employees, marking the most significant job cuts in the technology giant’s history.
According to a September SEC filing, Meta had a headcount of more than 87,000, twice the employees it had at the start of the pandemic in March of 2020.
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” employees heard from CEO Mark Zuckerberg via a 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.”
Taking full responsibility, Zuckerberg said that predictions of a post-Covid continuation of the Covid-led outsized revenue growth from a surge in e-commerce did not pan out which ultimately led to Meta's present position.
The job cuts will impact many corners of the company, but Meta’s recruiting team will be hit particularly hard as “we’re planning to hire fewer people next year,” Zuckerberg said in the post.
He added that a hiring freeze would be extended until the first quarter, with few exceptions, to try and offset high inflation, rising interest rates and fears of a looming recession.
Meta confronts a range of challenges to its core ad sales business as it deals with privacy changes implemented by Apple, sees advertisers tightening budgets and confronts tough competition from the likes of industry heavyweight TikTok.
Last month, the company posted its second quarterly revenue decline and said profits were halved from the prior year. Once valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion today.
Meta will see hard times ahead as it makes an uncertain and costly bet on pivoting to the metaverse, a future version of the Internet, whose widespread acceptance remains years away.
In the coming months, more cost-cutting changes are expected to be rolled out, Zuckerberg said, adding that Meta would be rethinking its real estate needs and “transitioning to desk sharing for people who already spend most of their time outside the office”.
“Overall, this will add up to a meaningful cultural shift in how we operate,” the CEO lamented.
Meta is not alone in feeling the pain of a market downturn, as inflation, rising interest rates and more macroeconomic headwinds have led to shifts in spending for the tech industry that had grown more and more dominant as consumers shifted their lives online during the pandemic.
Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.
Facebook-rival Twitter made sweeping cuts across the company on Friday under its new owner, Elon Musk. The cuts impacted its ethical AI, marketing and communication, search and public policy teams, among other departments. In the days since, however, Twitter u-turned and asked dozens of laid off employees to return, according to Bloomberg.
