Meta has laid off more than 11,000 employees, reducing its headcount by around 13 per cent, in the most dramatic cull in its history as the social media giant battles falling revenues and rising competition.
Chief executive Mark Zuckerberg emailed employees on Wednesday morning informing them of the redundancies.
“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 to those impacted,” he said.
Zuckerberg said revenue growth experienced during the pandemic had not been sustained, ad performance was down and ecommerce had declined, all in an environment of economic downturn and increased competition.
“[These factors] caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that,” he added.
Teams across the business are affected. Other cost-saving measures include reducing budgets and perks for staff, it added. The company’s “real estate footprint” will be “shrunk”, suggesting a number of offices will be closed.
US employees will receive a severance package of 16 weeks of base pay and two additional weeks of pay for every year of service, with no cap.
Meta shares rose 3 per cent in pre-market trading on Wednesday.
An economic slowdown including rising inflation and cost of capital has hammered Big Tech groups this year. Investors wiped more than $89bn from the company’s market capitalisation in late October after Meta posted declining revenues, and Zuckerberg failed to convince investors that his costly bet on building a digital avatar-filled metaverse, which is not expected to be profitable for many years, was paying off.
Meta has also acknowledged it faces increasing competition from rivals such as short-form video app TikTok and difficulties in targeting and measuring advertising because of changes Apple made to its privacy policy. Its share price has fallen 71.5 per cent in the year to date.
The restructuring will come just days after the new owner of Twitter, Elon Musk, fired half of the social media site’s 7,500-strong workforce in his attempt to overhaul the company’s business model, while a growing number of advertisers have pulled their spending from the platform entirely over concerns around his plans to relax content moderation.
Meanwhile, smaller rival Snap has also laid off about a fifth of its workforce, after posting its slowest growth.
In September, Zuckerberg announced internally he was implementing a hiring freeze for most roles across the company and intended to minimise costs. Since then, directors had been asked to draft lists of 15 per cent of their team members to be put on performance review, meaning they would have to find alternative roles or leave within 30 days, three people said.
Ahead of the job cuts, staffers described the mood internally as bleak. One said employees were fearful. Another said: “Everyone is in the dark and twisting in the wind.”