Facebook parent company, Meta, has begun laying off more than 11,000 staff members after CEO, Mark Zuckerberg, announced plans to relieve over 13% of staff of their jobs from today (Wednesday).
The CEO revealed this in a statement released on Wednesday, where he took full responsibility, saying that he overestimated the company’s potential growth during the Covid-19 period which led to more hiring of staff.
He added that to cut costs, the company would reduce discretionary spending and there would also be a hiring freeze throughout Q1 of next year.
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“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% and let more than 11,000 of our talented employees go.
“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,” he said.
Zuckerberg added that besides his misplaced optimism, other contributing factors which led to a significant reduction in revenue for the company were; the macroeconomic downturn, increased competition and ads signal loss.
He stated that affected employees would receive 4 weeks’ severance pay, along with other forms of compensation.
Last month, Meta had forecasted a very weak final quarter, which saw shares decline by almost 20%. The company’s stock value also lost $67 billion following the forecast.
Zuckerberg had said he expects the investments he has made in the metaverse to take about a decade to come to fruition. For now, however, he has had to pause hiring, close up projects etc. in order to reduce cost.
“In 2023, we’re going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today” he said during the earnings call.
This comes a few days after Twitter let go of half of its workforce, which is about 3.700 people, after being recently acquired by Elon Musk.
In response to this, Twitter employees expressed frustration on social media with the hashtag #OneTeam, after which they filed a class action lawsuit against the company, arguing that the company was obligated by law to provide a 60-day advance notice before conducting mass layoffs.