November 10, 2022: On Wednesday, Meta removed 13% of its team, or over 11,000 employees, CEO Mark Zuckerberg stated in a letter to employees.
“Today I’m sharing a few of the most difficult changes we’ve made in Meta’s history,” Zuckerberg stated in the letter. “I’ve decided to reduce our team’s size by 13% and let over 11,000 talented employees go. We also take several additional steps to be a leaner and more efficient company to cut discretionary spending and extend to hire the freeze through Q1.”
Shares of Meta increased 4% in premarket trading.
The layoffs come between a tough time for Facebook parent company Meta, providing lukewarm guidance in October for its future fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%.
Investors have been concerned about Meta’s rising costs and expenses, which increased 19% year over year in the third quarter to $22.1 billion. The company’s overall sales refused 4% to $27.71 billion in the quarter, while its active income dropped 46% from the previous year to $5.66 billion.
“I want to take accountability for these decisions and how we got here. I know this is difficult for everyone, and I am especially sorry for those impacted.” Zuckerberg said.
He said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire people in 2023. Zuckerberg said that the company extended its hiring freeze through the first quarter with an occasional exception.
“This is a sad point, and there is no way around that. To those leaving, I want to thank you again for everything you have put into this place,” he added.
Zuckerberg said that impacted workers would receive 16 weeks of pay plus two supplemental weeks for every year of service. Meta is covering health insurance for six months.
Meta invests in the metaverse, which generally refers to a yet-to-be-developed digital world that can be reached by virtual reality and augmented actuality headsets. This big bet has cost Meta $9.4 billion in 2022, and the company expects that failures “will increase hugely every year.”
During a call with judges as part of its third-quarter earnings report, Zuckerberg disseminated that Meta is planning to “focus our investments on a small number of improved stress metamorphosis rooms” the following year.