Mark Zuckerberg acknowledges his errors contributed to Meta’s difficulties as he apologizes for the need to lay off so many employees as part of broader efforts to reduce costs and concentrate the firm.
The owner of Facebook and Instagram, Meta, has laid off 13 percent of its workers in response to the deteriorating global economy.
The company stated on Wednesday that it will reduce its global workforce by more than 11,000 personnel as part of a broader reorganization designed to substantially reduce expenses while maintaining controversial investments in the metaverse.
Emails were sent to employees of Meta detailing what was occurring with them individually.
Due to concerns around access to sensitive information, the corporation stated that people losing their positions would be excluded from the majority of its systems as of today.
Those affected in the United States would get at least 16 weeks’ pay in compensation, plus an additional two weeks for each year of service.
The corporation stated that the arrangements would be similar elsewhere, although it was unclear whether any UK employees would be affected.
Meta’s European headquarters are in Ireland. Some permanent employees will be laid off, albeit the exact number is unknown as a consultation process is required by the country’s legislation.
Zuckerberg “accepts responsibility
As part of the restructuring, several office locations were to be closed around the world, and desk-sharing agreements were to be implemented in their place.
Staff benefits were also decreased.
In an internal email announcing the changes, Facebook founder and CEO Mark Zuckerberg expressed his desire to “accept responsibility for these decisions and how we got here.”
He conceded that his development plans had been overly optimistic, stating, “I was incorrect” when describing how Meta had gambled on ongoing high demand for e-commerce through its investments following the COVID pandemic’s greatest outbreak.
Following two straight quarters of declining sales, prominent shareholders had urged Zuckerberg to cut costs.
Some of the declines are attributable to falling ad sales across its platforms.
Investors question metaverse spending
But investors are particularly concerned about Reality Labs, Meta’s virtual and augmented reality branch, which incurs significant expenses.
With shares down 71% year-to-date, they have questioned Zuckerberg’s metaverse vision, since it remains unclear whether the prospects for applications in the field are exaggerated.
In his email to staff, he indicated an ongoing investment commitment to the division.
Zuckerberg stated of the layoffs, “While we’re making cutbacks across every organization, Family of Apps and Reality Labs, certain teams will be impacted more than others.
“Recruiting will be significantly impacted by our intention to hire fewer personnel next year.
Additionally, we are revamping our business teams dramatically.
He said, “The departing coworkers are talented and devoted, and have had a significant influence on our company and community.
“Each of you has contributed to the success of Meta, and I am grateful. I am confident that you will continue to do excellent work elsewhere.”
The layoffs are the latest among major technology companies.
Twitter, under the leadership of Elon Musk, is believed to have reduced its personnel by over half last week, while Microsoft reportedly let off 1,000 employees in October.
In pre-market trading, Meta shares rose by about 5 percent.
Susannah Streeter, the senior financial and markets analyst at Hargreaves Lansdown, said: “Mark Zuckerberg’s admission that he overestimated the company’s prospects is unlikely to reassure investors. Instead, they may be more unsettled.
“It faces an uphill battle to attract younger viewers, who are now dancing to the Pied Piper sounds of TikTok or creating groups and channels on Discord and Telegram.
“At the same time, Meta monies are being poured into the black plumbing of the metaverse, and it is extremely uncertain when revenue will emerge from this costly endeavor.
“He may have accepted responsibility for the current situation, but he continues to speak in terms of allocating resources to high-priority growth sectors, and the metaverse remains on that list.”
