Meta Platforms said on Wednesday it will let go of 13 per cent of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as the Facebook parent battles soaring costs and a weak advertising market.
The broad job cuts, the first in Meta's 18-year history, follow thousands of layoffs at other major tech companies including Elon Musk-owned Twitter and Microsoft Corp.
The pandemic boom that boosted tech companies and their valuations has turned into a bust this year in the face of decades-high inflation and rapidly rising interest rates.
Zuckerberg says 'sorry'
"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," Chief Executive Officer Mark Zuckerberg said in a message to employees.
"I want to take accountability for these decisions and for how we got here," Zuckerberg said in the statement. "I know this is tough for everyone, and I'm especially sorry to those impacted."
The company said that while reductions will happen across the company, its recruiting team will be disproportionately affected and its business teams would be restructured "more substantially." Meta will also reduce its real estate footprint, review its infrastructure spending and transition some employees to desk sharing with more cost-cutting announcements expected in the coming months.
Zuckerberg had warned employees in late September that Meta intended to slash expenses and restructure teams to adapt to a changing market. The Menlo Park, California-based company, which also owns Instagram and WhatsApp, implemented a hiring freeze, and the CEO said at the time that Meta expected headcount to be smaller in 2023 than it is this year.
"This is obviously a different mode than we're used to operating in," Zuckerberg said in a Q&A session with employees in September. "For the first 18 years of the company, we basically grew quickly basically every year, and then more recently our revenue has been flat to slightly down for the first time. So we have to adjust."
Severance
Meta said it would pay 16 weeks of base pay plus two additional weeks for every year of service as a part of the severance package and all remaining paid time off.
Employees will get cost of healthcare for six months and those impacted will receive their Nov. 15 vesting, according to the company.
Meta said it also plans to cut discretionary spending and extend its hiring freeze through the first quarter.
The company's shares, which have lost more than two-thirds of their value, were up about 3% in pre market trading.
