Meta lays off 11,000 people as tech industry cuts jobs

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Facebook’s parent company Meta plans to cut more than 11,000 jobs, or 13% of its workforce, as it seeks to cut spending and transform its business in a more competitive digital advertising market.

The social media giant will also cut discretionary spending and extend its hiring freeze through March in a bid to become “leaner and more efficient,” Meta CEO Mark Zuckerberg said in a statement Wednesday.

He called the layoffs “some of the toughest changes we’ve made in Meta’s history” and noted that all employees will soon receive an email “telling you what this layoff means to you.”

Zuckerberg said the company would refocus on priorities such as its advertising business and elevating content from viral creators to friends and family, a strategy that has made short-form video app TikTok so popular.

He said the job cuts affected the entire organization, although teams focused on recruiting workers were disproportionately reduced.

“We are restructuring teams to increase our efficiency,” Zuckerberg said. “But these measures alone will not bring our spending in line with our revenue growth, so I have also made the difficult decision to let people go.”

The layoffs mark a tumultuous new period in Silicon Valley, as tech giants long known as recession-proof bastions of economic power have laid off large numbers of workers in recent weeks. For years, companies have grown rapidly and hired at breakneck speeds. Facebook alone grew its staff by 28%, to 87,314, in the 12 months ending September, according to regulatory filings.

One of the biggest workforce reductions happened on Twitter last week, where new owner Elon Musk roughly halved his 7,500 staff – to the point that, over the weekend, some workers were invited back.

On Tuesday, media reported that hundreds of layoffs were underway at Salesforce, which sells enterprise software. Ride-sharing app Lyft, financial services platform Stripe and digital real estate marketplace Zillow have also cut staff, according to company statements and media reports.

Zuckerberg said each laid-off worker would receive 16 weeks of base pay and two additional weeks for each year worked. The company will also cover their health costs for six months.

He said the company has cut off access to most Meta systems for displaced workers, but their email will remain “active throughout the day so everyone can say goodbye”.

The layoffs at Meta – which changed its name from Facebook just over a year ago – come as the company takes a big gamble on the Metaverse. Part of the hiring boom in recent years has focused on creating immersive digital realms accessible through virtual reality, which chief executive Mark Zuckerberg says will be the next big computing platform after phones. mobile and will replace some in-person communications.

The company is investing heavily in virtual reality headsets and other technologies in an attempt to capture the market. Meta said it expects operating losses at Reality Labs, the division working on its hardware offerings, to increase even more in 2023.

Last month, the company unveiled its new $1,500 VR headset that it says will transform workers’ ability to collaborate with colleagues and get their jobs done.

But so far, that vision has been slow to materialize, in part because the company is still developing the underlying technology and a wider range of applications that would make it appealing to the general public. While the company currently dominates the VR headset market, Meta is likely to face significant competition in the Apple space.

Meta operates social media platforms Facebook and Instagram and messaging app WhatsApp, among other initiatives. Its blue app’s more traditional advertising-based business model has been hit particularly hard by larger economic challenges, including some digital advertisers cutting spending as rising inflation and the invasion of the ‘Ukraine by Russia have created market instability.

At the start of the COVID-19 pandemic, more retailers and shoppers flocked to e-commerce, boosting Meta’s revenue — a trend Zuckerberg said he thought would become permanent even after vaccines. became accessible and social restrictions eased. That didn’t turn out to be true, he said.

“Not only has e-commerce returned to earlier trends, but the macroeconomic slowdown, increased competition and loss of advertising signal has caused our revenue to decline from what I expected,” he said. he declares. “I was wrong and I take responsibility for it.”

The company is increasingly fending off competition for marketing dollars and users from upstart rivals such as TikTok, the short-form video platform that has taken off among younger generations. This year, the company reported that Facebook had lost daily users for the first time in its 18-year history, although user growth has since recovered. Last month, Meta announced the second straight drop in quarterly revenue.

And Meta estimated it will have lost $10 billion this year after Apple introduced privacy restrictions that forced app makers such as Facebook to explicitly ask users if they could collect data on their Internet activity, which has impaired the social media company’s ability to facilitate targeted actions. advertising campaigns. Facebook argued at the time that the new privacy rules would hurt small businesses that need granular user information to find potential customers.

In the face of these challenges, Meta executives increasingly warned employees that the company was entering a new era of higher performance expectations and greater focus on its most important goals.

On a recent call with investors, Zuckerberg touted the company’s decision to emulate the same strategy that made TikTok so popular: showing users entertaining content from strangers on their friends’ and family’s posts. family. The company also promotes its short-form video product, Reels, on Instagram and Facebook, as well as business messaging.

During the same call, Facebook said it plans to slow hiring significantly and keep its workforce next year at about the same level as it is today.

More than a month ago, Meta said it would stop making new offers to candidates, sourcing candidates and approving internal transfers while the company reevaluates how best to prioritize its staffing resources. , according to a note posted on the company’s internal bulletin board viewed by the Washington Post. Zuckerberg said Wednesday that the company would extend its hiring freeze through the first quarter of 2023 “with a small number of exceptions.”

Last summer, Lori Goler, the company’s chief human resources director, advised managers to implement the “rigorous performance management” practices that Meta relied on before the pandemic, such as giving feedback criticism of struggling employees.

In July, Meta engineering manager Maher Saba instructed engineering managers in an internal memo to identify and eliminate their underperforming employees.

“If a direct report is coasting or performing poorly, we don’t need them; they are failing this business,” Saba wrote. “As a manager, you can’t allow someone to be net neutral or negative for Meta.”

Such messages from corporate executives created a wave of anxiety and resentment among Facebook employees. Some fear losing their jobs or seeing their annual premiums reduced. Others worry that an already harsh corporate environment will become even more competitive as employees compete for fewer coveted positions, the Post reported.

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