Meta CEO Mark Zuckerberg announced Wednesday that the company will lay off 13% of its staff, or approximately 11,000 employees.
In the letter, Zuckerberg said: "I am sharing some of the most difficult changes that Meta has had to go through." "I will reduce the size of the team by 13% and I will lay off over 11,000 talented employees."
Our hiring freeze will also be extended to the first quarter to make us more agile and efficient. ”On Wednesday morning, Meta's stock was up by about 7.7%. In late October, Facebook's parent company Meta gave tepid indications of its fourth-quarter earnings, frightening investors and dropping its shares by nearly 20%.
Meta's third-quarter costs and expenses increased 19% year-over-year to $ 22.1 billion, raising investor concerns. Total sales fell 4% to $ 27.71 billion in the quarter, while operating income fell 46% to $ 5.66 billion from the previous year.
The company plans to cut staff in 2023, which will disproportionately affect recruiting. According to Zuckerberg, the company extended the hiring freeze until the first quarter. I want to thank those who leave for everything they have contributed to this place ”, she concluded. For each year of service, affected employees will receive an additional two weeks' pay, Zuckerberg said. So far, Meta has lost $ 9.4 billion in 2022 due to this hefty gamble and losses are expected to grow significantly. "In the next year, some teams will grow significantly, but most will be stagnant or shrinking," said Zuckerberg.
Mark Zuckerberg's letter to employees follows:
I am firing over 11,000 of our talented employees as part of my quest to reduce our team size by approximately 13%.
By reducing discretionary spending and extending the hiring freeze during the first quarter, we will become a more agile and efficient company.
How did we get here?
When Covid started, the world moved quickly online, and e-commerce led to massive revenue growth.
Our revenues were much lower than expected due to a macroeconomic downturn, increased competition and the loss of advertising. My mistake was on my part and I take responsibility for it.
We need to be more capital efficient in this new environment. Our assets have been reassigned to smaller, high-priority areas such as our AI discovery engine, advertising and trading platforms, and a long-term vision for the metaverse.
Our business cut budgets, cut profits, and reduced our real estate footprint to cut costs. However, these measures alone will not bring our spending in line with our revenue growth, which is why I have also let people go. How will it work?
Layoffs are not easy, but we will send you all relevant information as soon as possible and support you in any way possible. Each of you will shortly receive an email explaining what this layoff means to you. Any interested employee will have the opportunity to ask questions and participate in briefings.
Termination. For each year of service we will pay 16 weeks of base salary plus two additional weeks. PTO All remaining PTOs will be paid. Acquisition of RSU. All interested parties will receive accrual on November 15, 2022. Health insurance. The cost of medical care for individuals and their families will be covered for six months. Career services.
We will provide three months of professional support with an external provider, including early access to unpublished employment opportunities. Immigration support. It is especially difficult if you have a visa.
Our support outside of the United States will be similar and we will soon be following procedures that comply with local labor laws. We have removed access to most Meta systems for people leaving today due to the sensitive information they had access to. We will keep the email addresses active throughout the day so that everyone can say hello. While we're making reductions for App Family and Reality Labs, some teams will be more interested than others. Our sales teams are also undergoing a substantial restructuring. The work of these groups does not reflect what we will need in the future. In the coming days, the leaders of each group will set the time to discuss what this means for their team.
We will lose talented and passionate teammates who have had a significant impact on our company and community. Thanks to each of you, Meta was a success. I hope they continue to do a great job in other organizations in the future.
Are there any other changes we need to make? As a last resort, we have decided to reduce other cost sources before letting teammates go. The result will be a significant change in our culture. We are switching to desk sharing for people who spend most of their time away from the office as we reduce our real estate footprint. In the coming months, we will implement further changes to save costs.
We are also extending the hiring freeze to the first quarter, with some exceptions. Our business performance, operational efficiency and other macroeconomic factors will determine whether and to what extent we should resume hiring at that time.
As a result, we will be able to achieve a more efficient cost structure than we have recently described to investors.
I am currently examining our infrastructure spending in depth. As we build our AI infrastructure, we focus on becoming even more efficient. Meta will continue to benefit from its infrastructure and I think we can do it for less. In essence, we are making all of these changes because our revenue outlook is lower than expected earlier this year. We want to make sure we operate efficiently across the entire family of reality labs and apps.
What should we do next?
There is no escape from the sadness of the situation. I want to thank once again those who are leaving for all the work they have put into this place. Thanks to your hard work, we wouldn't be where we are today. I know this is a difficult time for those who stay. Many of you also feel insecure about the future as we greet the people we have worked closely with. We are making these decisions to ensure that our future is bright.
Today we are undervalued as a company. With enormous potential ahead of us, our core business is among the most profitable ever created. Furthermore, we are developing the next generation of computing platforms and social connection technologies. Our work is historically significant. We will come out of this recession stronger and more resilient if we work efficiently.
We will share more on how we will operate as a lean organization in the coming weeks. Once again, I want to thank those who are leaving for all they have done to carry out our mission.