Facebook parent company, Meta to lay off 11,000 employees

The management of Meta, Facebook parent company has disclosed on Wednesday of decision to  lay off more than 11,000 of its employees and  plans to cut discretionary spending and extend its hiring freeze through the first quarter..

Penpushing reports that, the Chief Executive Officer of Meta, Mark Zuckerberg, made this known in a message to his employees adding that the layoffs will reduce the company’s workforce by about 13 per cent.

‘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’,. Zuckerberg said

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. 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 added

Penpushing further reports that, the Chief Executive Officer of the company explained that the development follows his decision to significantly increase investments at the start of the pandemic, but lamented that, this did not play out the way he expected.

“Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that”, he stressed.

Penpushing also reports that, Zuckerberg, on the need to become more capital efficient, said the company has shifted resources onto a smaller number of high-priority growth areas such as its AI discovery engine, ads and business platforms, and its long-term vision for the metaverse.

“We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go,” he said.

Penpushing reports that, Zuckerberg pointed out that affected employees in the United States of America (USA)  will receive 16 weeks of severance pay plus two additional weeks for every year of service, with no cap.

The company boss added that  all remaining paid time off, employees will get the cost of healthcare for six months and those impacted will receive their November 15 vesting, and provide three months of career support with an external vendor, including early access to unpublished job leads and immigration support for people on visas.

Penpushing further reports that, Zuckerberg said for those outside America, support will be similar, and the company will follow up soon with separate processes that take into account local employment laws, while it is recalled that in September, Meta said it had 87,314 employees as of the third quarter of 2022, an increase of 28 per cent year-over-year.

The company in same vein, last month, posted its second-quarter revenue decline and said that its profit was cut in half from the prior year, while the establishment valued market value has since plunged to around $250 billion, contrary to value of more than $1 trillion last year, and in recent time competition from TikTok is said to be a growing threat to the company as younger people flock to the video-sharing app over Instagram, which Meta also owns.

Penpushing also reports that, the company formerly named Facebook, changed its name to focus on the metaverse, a virtual reality world that has yet to be fully developed, while its new strategy, has failed to reassure investors, who have also raised concerns about Meta’s rising costs and expenses.

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