Meta to let go 11,000 employees as Zuckerberg admits he got company projections wrong

Facebook’s parent company Meta is laying off 11,000 of its employees in what is one of the largest workforce cuts this year in the United States. A weak advertising market and soaring costs have been attributed to the 13% cut in the company’s workforce. But, Meta is just one of the major tech companies to conduct such cuts, joining Elon Musk’s Twitter and Microsoft Corp.

According to The Straits Times, the scalebacks are the first in the company’s 18-year history. Since its founding in 2004, the current digital advertising market has slowed, along with the US economy teetering on the brink of a recession.

Insider magazine noted that the company employed more than 87,000 people as of September 30. Meta Platforms Chief Executive Officer, Mark Zuckerberg, warned employees at the end of September that there would be a restructuring to adapt to the changing market. The company also says it will extend its hiring freeze through the first quarter of next year in light of high inflation and rapidly rising interest rates. Zuckerberg says the reductions will occur company-wide, with its recruiting team seeing the most cuts. Its business teams will also be substantially restructured.

“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry for those impacted.”

Meta will also transition some of its employees to desk sharing, reduce its real estate footprint, and review its infrastructure spending. The cuts by Meta and other major tech companies come as the pandemic’s boom came crashing down. Zuckerberg admitted that his previous anticipations of the surge in e-commerce and web traffic from the pandemic were faulty. Zuckerberg’s multibillion-dollar virtual-reality push of the metaverse has also contributed to the company’s recent moves to restructure.

“But the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than expected. I got this wrong.”

Meta saw its stocks plunge by 71% this year, with its profits falling to US$4.4 billion, a 52% decrease from last year.