Meta Confirms Layoffs—11,000 Jobs Cut At Facebook’s Parent Company

Topline

Meta, the parent company of Facebook, WhatsApp and Instagram, confirmed plans to lay off thousands of workers on Wednesday, the latest tech giant to trim headcount amid gloomy economic forecasts and uncertain prospects.

Zuckerberg confirmed Meta is laying off 11,000 workers.

Key Facts

Meta founder and chief executive Mark Zuckerberg told workers the firm will cut its headcount by 13%, or 11,000 employees, amid falling revenue, grim global economic forecasts and increased competition.

The firm will also extend its hiring freeze through the first quarter of 2023 and cut discretionary spending in a bid to become a more efficient and streamlined company, Zuckerberg said, as well as restructuring teams, reducing its real estate footprint and cutting perks.

Zuckerberg said the recruiting team would be disproportionately affected by the layoffs and business teams will be restructured “more substantially” than others to reflect new priorities.

Meta said it would pay U.S. workers 16 weeks of base pay plus two additional weeks for every year of service as part of its severance package, as well as cover health insurance for people and families for six months and pay for all remaining paid time off, with “similar” support for those outside the U.S.

Zuckerberg took responsibility for the decisions and told employees he erroneously expected the surge of e-commerce and growth at the onset of the Covid-19 pandemic would be a “permanent acceleration that would continue even after the pandemic ended.”

What To Watch For

Meta shares rose more than 4% in premarket trading Wednesday morning.

Crucial Quote

“I got this wrong, and I take responsibility for that,” Zuckerberg said in a message to employees after explaining how he thought the digital pandemic boom would continue. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected,” he said.

Key Background

The announcement confirms reporting from the Wall Street Journal on Tuesday that Meta was set to begin layoffs on Wednesday. The job cuts are not totally unexpected—Zuckerberg announced plans for sweeping team changes, budget cuts and a reduced headcount in September—and show that even Silicon Valley’s usually untouchable behemoths must reckon with the industry-wide downturn as advertisers slash spending. The layoffs mark the beginning of a new era for Meta and are the first major cuts to its workforce since Facebook was founded in 2004. Meta is not the only tech company having to cut back and many went on prolific hiring sprees during the pandemic, taking on thousands of new employees. Amazon and Apple have both reportedly implemented hiring freezes and Salesforce, Lyft and Stripe announced layoffs.

Forbes Valuation

$35.5 billion. That’s the estimated net worth of Meta co-founder Mark Zuckerberg, according to Forbes’ real-time tracker. Zuckerberg, who took Facebook public in 2012, is the 29th richest person in the world today. He, alongside his wife Priscilla Chan, pledged to give away 99% of their Facebook stake over their lifetime.