CALIFORNIA, November 9, 2022—Mark Zuckerberg the owner of Meta, Facebook and Instagram, has become the latest big tech player to wield the axe in the tougher global economy, laying off 13% of its workforce.
Zuckerberg announced on Wednesday the company will cut its global headcount by more than 11,000 employees as part of a wider shake-up of the business that aims to drastically cut costs but maintain controversial investment in the metaverse.
Meta’s staff were being told what was happening to them individually via email.
They could notice all was not well in advance because the company said those losing their jobs would be excluded from most of its systems today due to concerns about access to sensitive information.
Those affected in the US would get at least six weeks salary as compensation, plus a further two weeks’ wages for every year served.
The arrangements would be similar elsewhere, the company said, though it was unclear whether any UK jobs were affected.
Meta has its European HQ in Ireland. Sky News understands that some permanent staff will lose out, though the numbers involved are not clear as a consultation process has to begin under the country’s laws.
Zuckerberg ‘takes accountability’
A number of office sites were to be shut globally under the restructuring – with desk share arrangements being put in place instead.
Staff perks were also being reduced.
Founder and chief executive Mark Zuckerberg told staff in an internal email explaining the changes that he wanted “to take accountability for these decisions and for how we got here.”
He admitted his own plans for growth had been too optimistic, saying “I was wrong” when outlining how Meta had bet on continued high demand for e-commerce through its investments after the worst of the COVID pandemic.
Zuckerberg had faced calls from top shareholders to slash costs following two consecutive quarters of falling revenue.
Some has been due to declining ad sales across its platforms.
Investors question metaverse spending
But investors are also concerned about Meta’s big spending on its virtual and augmented reality division called Reality Labs.
They have called Zuckerberg’s metaverse vision into question – with shares down 71% in the year to date – as it remains unclear whether the prospects for applications in the space are overblown.
He signalled a continued investment commitment to the division in his note to staff.
Zuckerberg said of the job cuts: “While we’re making reductions in every organisation across both Family of Apps and Reality Labs, some teams will be affected more than others.
“Recruiting will be disproportionately affected since we’re planning to hire fewer people next year.
“We’re also restructuring our business teams more substantially.”
He added: “The teammates who will be leaving us are talented and passionate, and have made an important impact on our company and community.
“Each of you have helped make Meta a success, and I’m grateful for it. I’m sure you’ll go on to do great work at other places.”
Source: Sky News wrote the origina article.