Around 13 percent of the company's staff will be laid off. The CEO said in a post that he was to blame for being overoptimistic about the company's future growth.
The world quickly moved online and the surge of e- commerce led to outsized revenue growth. Many people predicted that this would continue after the Pandemic. I decided to increase our investment. The way this played out was not what I was expecting.
The layoffs are the first in a long time.
The company would become leaner and more efficient by cutting spending and staff, as well as shifting more resources to a smaller number of high priority growth areas. The company's recruiting team would besproportionately affected by the cuts. The layoffs are the first broad cuts since Meta was founded in 2004.
Meta has been hit hard. The company's prospects have been affected by both strong competition from rivals and erratic strategy as a result of a projected downturn in the US economy.
Changes to Apple's privacy policy and the rise of TikTok have squeezed Meta's lucrative ad business. Meta has lost $9.4 billion on its metaverse technology so far, and it expects to spend more in the future. Managers at Meta have been forced to shame employees into using the flagship metaverse social platform, which is buggy and unpopular.
In response to today's job cuts, Meta's stock increased in value.
The bad news has caused Meta's stock to plummet. It has lost $700 billion in market value in the last few weeks, and its stock price has dropped more than 70 percent this year. The company's stock price went up more than 4% in pre-market trading after the announcement of job cuts.
Tech firms are not the only ones to report layoffs. The layoffs of hundreds of employees were confirmed this week by the company, as well as the plans to cut 20 percent of its workforce by the end of the year.
Zuckeberg said in the post that laid off employees in the US would receive 16 weeks of base pay, two additional weeks for each year of service, and support for finding a new career and navigating immigration issues. The company would be instituting a hiring freeze through the first quarter of next year.
The Meta CEO sent a message to employees that was aimed at those who were skeptical of the company's move into the metaverse.
“I believe we are deeply underestimated as a company today,” wrote Zuckerberg. “Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform.”
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