Mark Zuckerberg has announced Meta, which owns Facebook and Instagram, will sack 11,000 workers – about 13% of its staff.
It comes after hundreds of billions of dollars of losses this year. In a note to staff, Zuckerberg said he was “wrong” to pivot heavily to e-commerce during the pandemic.
He said the cuts would make Meta “leaner and more efficient”, but also said he plans to increase controversial investments.
Zuckerberg told staff the changes were “some of the most difficult” in Meta’s history.
“At the start of COVID, the world rapidly moved online… I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected… I got this wrong, and I take responsibility for that.”
Meta’s stock value fell by over $100 billion in late October after the company published new figures showing large expenses and struggling revenue. It has lost nearly three-quarters of its value this year.
The staff announcement, which could save up to $2 billion, led to a small share price jump.
However, there are ongoing concerns about whether Zuckerberg’s investment in developing ‘metaverse’ technology will pay off.
The term ‘metaverse’ refers to platforms for interaction in a virtual world.
Zuckerberg is enthusiastic about the metaverse and has invested substantial money in developing the virtual platform Horizon Worlds, which offers games, work meetings, and digital accessories. However, early versions of Horizon Worlds have been criticised.
In his note to staff this week, Zuckerberg said Meta would shift more resources into the metaverse and other “high priority growth areas” such as artificial intelligence and ads.
Zuckerberg told staff they would be informed by email if they were included in the layoffs. Affected employees were immediately removed from most of the company’s systems “given the amount of access to sensitive information”.
He promised at least 16 weeks of severance pay and six months of health insurance for U.S. employees, and similar support for non-U.S. employees.
He also announced cuts to non-employee costs, including the company’s physical real estate.
“This is a sad moment, and there’s no way around that… I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform.”Meta CEO Mark Zuckerberg in a statement