Meta, owner of Facebook and Instagram, has become the latest big tech company to wield the axe in a tougher global economy, cutting 13% of its workforce.
The company announced Wednesday that it will lay off more than 11,000 employees globally as part of a broader restructuring of its business aimed at slashing costs but maintaining controversial investments in virtual worlds.
Yuan Staff were individually informed of what had happened via email.
They may have noticed in advance that all was not well, as the company said those who lost their jobs would be left out of most of its systems today due to fears of accessing sensitive information.
Those affected in the U.S. will receive at least six weeks of pay as compensation, plus an additional two weeks for each year of service.
The company said arrangements elsewhere would be similar, but it was unclear if any UK jobs were affected.
Meta has European headquarters in Ireland. Sky News understands that some long-term staff will be eliminated, although the number involved is unclear as a consultation process must begin under the country’s law.
Zuckerberg ‘takes responsibility’
During the restructuring, many offices around the world will close and be replaced by desk-sharing arrangements.
Employee allowances are also being reduced.
Founder and CEO Mark Zuckerberg told employees in an internal email, explaining that he wants to be “responsible for these decisions and how we got here.”
He admitted that his own growth plans were too optimistic, saying “I was wrong” when outlining how Meta was betting on continued high demand for e-commerce by investing in the wake of the worst of the COVID-19 pandemic.
Zuckerberg faces calls from major shareholders to cut costs after two consecutive quarters of declining revenue.
Some are due to declining ad sales on its platform.
Investors question Metaverse spending
But investors are also concerned about Meta’s huge spending on its virtual and augmented reality unit called Reality Labs.
They questioned Zuckerberg’s vision for the metaverse — shares are down 71% so far this year — because it’s unclear whether the field’s promise of applications is being overblown.
He hinted at a commitment to continued investment in the division in a note to employees.
Zuckerberg’s long and painful road to success
Technology reporter Tom Acres
“Absolute train wreck.” “A big gamble.” “A long and painful road.”
It’s just some recent fervent support for Mark Zuckerberg’s quest for virtual-world glory — but none seem to be holding him back.
The Facebook founder is going all-in on his vision for tomorrow, believing that in the not-too-distant future, most of us will regularly put on our headsets to enter his virtual world.
Whether you want to play a game, attend a conference, teach a class, or hang out with friends, he believes that the Metaverse will soon be the place for you.
With a net worth of $36bn (£31.7bn), “go big or go home” is a stance he can afford.
His employees, as evidenced by the thousands of layoffs today, cannot.
Read the full analysis Gentlemen
Zuckerberg said of the layoffs: “While we’re cutting every organization in App Family and Reality Labs, some teams will be impacted more than others.
“Hiring will be disproportionately affected as we plan to hire fewer people next year.
“We are also restructuring our business teams more substantially.”
He added: “The teammates who are leaving us are talented, passionate and have made a major impact on our company and our community.
“I’m grateful for each of you who helped make Meta a success. I’m sure you’ll continue to do great work elsewhere.”
For more on science and technology, explore the future with Sky News at Big Ideas Live 2022.
Learn more and book tickets here
The layoffs are the latest among major tech companies.
Twitter It is understood that under the ownership of Elon Musk, the number of employees has been cut by nearly half last week, while the Microsoft reportedly laying off 1,000 jobs in October.
Meta shares rose nearly 5% in premarket trading.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said: “Mark Zuckerberg’s ‘mea culpa’ statement is unlikely to reassure investors, instead they may be reassured by his admission that he overestimated the company’s prospects. further disturbed.
“It’s facing an uphill battle trying to attract younger audiences who are now dancing to TikTok’s Pied Piper tunes or setting up groups and channels on Discord and Telegram.
“Meanwhile, Meta money is being poured into the dark pipes of the virtual world, and it’s very unclear when this expensive project will generate revenue.
“He may have taken responsibility for the current situation, but he still uses the same language to move resources to high-priority growth areas, and the metaverse is still on that list.”