Facebook parent company Meta to lay off 13% of employees in ‘most difficult change’

CEO Mark Zuckerberg personally accepts responsibility for wrongly expecting COVID-19 boost in e-commerce and online activity to continue even after pandemic

Facebook CEO Mark Zuckerberg speaks at Georgetown University in Washington, October 17, 2019. (Nick Wass/AP)
Facebook CEO Mark Zuckerberg speaks at Georgetown University in Washington, October 17, 2019. (Nick Wass/AP)

Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.

Zuckerberg said it was “the most difficult changes we’ve made in Meta’s history.”

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

He said the cuts would affect Meta’s research lab focusing on the metaverse as well as its apps, which include Facebook, Instagram and messaging platform WhatsApp.

Zuckerberg told staff he had expected the boost in e-commerce and online activity during the Covid pandemic to continue, but added: “I got this wrong, and I take responsibility for that.”

Meta’s profits fell to $4.4 billion in the last quarter, a 52 percent decrease year-on-year.

A car passes Facebook’s new Meta logo on a sign at the company headquarters in Menlo Park, California, on October 28, 2021. (Tony Avelar/AP)

The move that comes just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk.

Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.

An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta’s woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.

Some of the pain is company-specific, while some is tied to broader economic and technological forces.

Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs “when the company is losing over $4M/day,” though did not provide details about the losses.

Meta has worried investors by pouring over $10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.

Competition from TikTok is also a growing threat as younger people flock to the video sharing app over Instagram, which Meta also owns.

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