The parent company of Facebook, Meta, cuts down employment by more than 13%. More than 11,000 workers will need to be let go as a result.
It was the hardest decision Meta had to make in its history, CEO Mark Zuckerberg stated in a letter to his personnel on Wednesday. The letter also included some recommendations to improve the business’s productivity. Until the first quarter of 2023, Meta will cut back on discretionary spending and stop hiring. The share of Meta increased by 7.7% on the same day.
After Meta’s poor performance in the previous quarter, the management concluded. Due to skepticism among investors regarding the company’s future, the company lost more than 20% of its shares. According to Meta investors, the company’s costs and expenses increased drastically, rising by about 19% annually. And the company’s costs in the third quarter came to about $22.1 billion. A 4% drop in sales coincides with the cost increase.
“I want to take accountability for these decisions and how we got here. I know this is tough for everyone, and I’m especially sorry for those impacted,” said Zuckerberg.
Meta cutting some employees
The CEO also mentioned that Meta will make fewer hires in 2023. As a result, the company will provide compensation to the workers who were impacted by the widespread layoffs. The 11,000 employees should be paid for 16 weeks, according to Zuckerberg. In addition, the worker receives an extra two weeks of pay for each year they worked for Meta. Zuckerberg pledged to pay for the affected employees’ health insurance for six months.
“This is a sad moment, and there’s no way around that. So to those leaving, I want to thank you again for everything you’ve put into this place,” the CEO added.
“That means some teams will grow meaningfully, but most others will stay flat or shrink over the next year. So, in aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today,” he added.
The metaverse’s development is the current focus of meta. Through augmented reality headsets and virtual reality tools, one can enter a different world in this new “universe.” The progress has already cost them $9.4 billion, according to Zuckerberg. According to Meta, the metaverse will require additional funding to be completed, so that is another concern.
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Zuckerberg wrote to employees
The following are some excerpts from Zuckerberg’s letter to the Meta staff:
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. 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.
Everyone will get an email soon letting you know what this layoff means for you. After that, every affected employee will have the opportunity to speak with someone to get their questions answered and join information sessions.
Some of the details in the US include:
- With no cap, we will pay 16 weeks of base pay plus two additional weeks for every year of service.
- We’ll pay for all remaining PTO time.
- RSU vesting. Everyone impacted will receive their November 15, 2022, vesting.
- Health insurance. We’ll cover the cost of healthcare for people and their families for six months.
- Career Services. We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.
- Immigration support. I know this is especially difficult if you’re here on a visa. However, there’s a notice period before termination and some visa grace periods, so everyone will have time to make plans and work through their immigration status. In addition, we have dedicated immigration specialists to help guide you based on what you and your family need.