Meta has announced that it is cutting more than 11,000 jobs, or 13% of its workforce.
The company is also cutting discretionary spending and extending its hiring freeze through the first quarter of next year.
This follows a challenging set of financial results for Q3 2022, where Meta reported a 52% fall in net income to $4.4bn and a 4% drop in advertising revenues to $27.2bn. Ad impressions across Meta’s apps, Facebook, Instagram and WhatsApp, rose by 17% in the quarter, but the average price-per-ad continued to decrease.
Meta chief executive Mark Zuckerberg said the business had moved its resources to focus on areas including its ads and business platform, its AI discovery engine and the metaverse. It has also cut costs by reducing budgets and perks and shrinking its real estate footprint.
In a message to Meta employees, Zuckerberg described the job cuts as “the most difficult changes in Meta’s history”.
He said: “I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”
Zuckerberg said he was taking responsibility for the situation after wrongly predicting that increases in ecommerce at the start of Covid, which led to a rise in revenue growth for Meta, would continue after the pandemic ended.
He added that he had decided to significantly increase the tech giant’s investment during that time, which had not worked out the way he expected.
Zuckerberg said: “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. I got this wrong, and I take responsibility for that.”
According to Zuckerberg, all employees were told how they were affected over email, with those leaving losing their access to “most Meta systems” immediately.
He outlined that affected staff would receive at least 16 weeks of severance pay, as well as health insurance cover for six months, with US-based employees also receiving immigration support.
Zuckerberg said: “This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions.
“To those who are staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to make sure our future is strong.”
Meta is the latest of the big tech companies to make mass job cuts, with Twitter cutting about half of its workforce earlier this week, following the takeover by Elon Musk.