Mark Zuckerberg released a message, revealing more than 11,000 “talented employees” will be released, which is 13% of the total workforce. The founder of Facebook said he takes accountability and is “especially sorry” to the impacted. He also pointed misjudgments in investments, the weak ad market and the macroeconomic downturn as some of the reasons for the mass layoff.
The executive revealed that predictions on how the online world will move forward after COVID did not play out as expected, and the company faced increased competition, ad loss, leading to diminished revenue. Meta “needs to become more capital efficient” and will shift resources onto a smaller number of high-priority growth areas like the AI discovery engine, as well as the long-term vision for the metaverse.
The company will also scale back budgets, reduce perks and will shrink the real estate footprint, meaning employees will have to share desks in the future. All these measures are not enough to keep the revenue growth, and that’s why Zuckerberg decided to release 13% of the total workforce.
Terminated employees in the United States will receive severance pay, paid remaining PTO, health insurance for the next six months and assisted career support through a third-party vendor. Support will be similar outside the US, the letter reads, taking into account local employment laws.