About 13 percent of Meta's workforce is going to be laid off, according to a message from CEO Mark Zuckerberg. He said his previous decision to increase spending didn't pay off as he thought it would, and that Meta's revenue outlook is lower than anticipated.
The number of employees at Meta increased by 28 percent in the past year.
The surge of e- commerce led to outsized revenue growth at the start of Covid. "Many people predicted that this would be a permanent acceleration that would continue even after the Pandemic ended." I decided to increase our investments. The way this played out was not what I was expecting. The macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be lower than I had anticipated. I took responsibility for getting this wrong.
The company has cut costs across the board, including scaling back budgets, reducing perks, and Shrinking our real estate footprint. Meta is restructuring teams to increase efficiency and cutting discretionary spending, but they won't bring our expenses in line with our revenue growth, he wrote.
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He is committed to his plans. We need to become more efficient. He wrote that they have shifted more of their resources onto a smaller number of high priority growth areas.
The layoffs were reported yesterday by a group of hundreds of executives. According to The Wall Street Journal, Mr. Zuckerberg appeared downcast in Tuesday's meeting and said he was accountable for the company's mistakes, and that his over-optimism about growth had led to overstaffing.
In the US, laid off workers will get 16 weeks of base pay plus two weeks for each year at the company. All remaining vacation time will be paid for by the workers. There will be separate processes that take into account local employment laws.
Since we're planning to hire fewer people next year, recruiting will be disproportionately affected. The business teams are being restructured more substantially.
If foreign exchange rates had stayed the same, Meta's revenue would have increased by 2%. The total costs and expenses increased by 19 percent. The company had a net income of $9.2 billion in the third quarter of 2021.
Meta stock was up more than 7 percent this morning, but is still down more than 70 percent by the end of the year.
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