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CNN Business
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Facebook parent company Meta announced on Wednesday that it was laying off 11,000 employees, marking the largest job cuts in the tech giant’s history.
The job cuts come as Meta faces a series of challenges to its core business and makes an uncertain and costly bet on pivoting to the Metaverse. It also comes amid a series of layoffs at other tech companies in recent months, as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession. .
“Today, I share some of the toughest changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in a blog post to employees. “I have decided to reduce the size of our team by approximately 13% and let over 11,000 of our talented employees go. »
The job cuts will impact many areas of the business, but Meta’s recruiting team will be particularly hard hit as “we expect to hire fewer people next year,” Zuckerberg said in the post. . He added that a hiring freeze would be extended through the first quarter, with some exceptions.
As of September, Meta had more than 87,000 employees, according to a September SEC filing.
Meta’s core ad sales business has been hit by privacy changes implemented by Apple, advertisers tightening budgets and increased competition from new rivals like TikTok. Meanwhile, Meta has spent billions to build a future version of the Internet, dubbed the Metaverse, which is likely years away from widespread acceptance.
Last month, the company posted its second quarterly revenue decline and said its profit had been cut in half from a year earlier. Once valued at over $1 trillion last year, Meta’s market value has since dropped to around $250 billion.
“I want to take responsibility for these decisions and how we got here,” Zuckerberg wrote in his post Wednesday. “I know this is difficult for everyone, and I’m especially sorry for those affected.”
Shares of Meta rose 5% in trading on Wednesday after the announcement.
Meta isn’t the only one feeling the pain of a market downturn. The tech sector has faced a dizzying reality as inflation, rising interest rates and more macroeconomic headwinds have driven a stunning shift in spending for an industry that has only become more dominant. as consumers spent more of their lives online during the pandemic.
“At the onset of Covid, the world quickly came online and the rise of e-commerce drove outsized revenue growth,” Zuckerberg wrote on Wednesday. “Many people predicted that this would be a permanent acceleration that would continue even after the pandemic was over. I, too, have therefore taken the decision to considerably increase our investments. Unfortunately, it didn’t go as I had hoped.
“I was wrong and I take responsibility for it,” he added.
Meta’s workforce in September was nearly double the 48,268 employees it had at the start of the pandemic in March 2020.
A handful of tech companies have announced hiring freezes or layoffs in recent months, often after experiencing rapid growth during the pandemic. Last week, ride-sharing company Lyft said it was laying off 13% of its employees, and payment processing company Stripe said it was cutting 14% of its workforce. On the same day, e-commerce giant Amazon announced that it was implementing a pause in corporate hiring.
Also last week, Facebook rival Twitter announced sweeping layoffs affecting roles across the company as its new owner, Elon Musk, took the helm.
In addition to the layoffs, Zuckerberg said the company plans to “implement more cost-cutting changes” in the coming months. Meta, which like other tech giants is known for its expansive, perk-filled offices, is rethinking its real estate needs, he said, and “moving to office sharing for people who are already spending the most of their time away from the office”.
“Overall,” he said, “this will contribute to a significant cultural shift in the way we operate.”
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