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Facebook parent company Meta plans to cut more than 11,000 jobs, or 13 percent of its workforce, as it seeks to scale back expenses and transform its business in a more competitive digital advertising market.
The social media giant also will cut discretionary spending and extend its hiring freeze through March in a bid to become “leaner and more efficient,” Meta CEO Mark Zuckerberg said in a Wednesday statement.
He called the layoffs “some of the most difficult changes we’ve made in Meta’s history,” and noted that all employees will soon get an email “letting you know what this layoff means for you.”
Zuckerberg said the company would refocus on such priorities as its advertising business and elevating content from viral creators over friends and family, a strategy that has made the short-form video app TikTok so popular.
He said the job cuts affected the entire organization, though teams focused on recruiting workers were disproportionately downsized.
“We’re restructuring teams to increase our efficiency,” Zuckerberg said. “But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
The layoffs mark a tumultuous new period in Silicon Valley, as tech giants long known as bastions of economic power and recession-proof have shed huge numbers of workers in recent weeks. For years, the companies have grown rapidly and hired at ravenous speeds. Facebook alone grew its staff 28 percent, to 87,314, in the 12 months ending in September, regulatory filings show.
One of the biggest downsizings happened at Twitter last week, where new owner Elon Musk cut roughly half its 7,500-member workforce — to the point that, over the weekend, some workers were asked to come back.
On Tuesday, media reports surfaced that hundreds of layoffs were underway at Salesforce, which sells business software programs. Ride-hailing app Lyft, financial services platform Stripe and digital real estate marketplace Zillow have also cut staff, according to company statements and media reports.
Zuckerberg said every laid off worker would receive 16 weeks of base pay and two additional weeks for every year worked. The company will also cover their health care costs for six months.
He said that the company has cut off access to most Meta systems for displaced workers but that their email will remain “active throughout the day so everyone can say farewell.”
The layoffs at Meta — which changed its name from Facebook a little over a year ago — come as the company is taking a big gamble on building the metaverse. Part of the hiring boom of recent years has focused on building immersive digital realms accessed through virtual reality, which Zuckerberg says will be the next great computing platform after mobile phones and replace some in-person communication.
The company is heavily investing in virtual reality headsets and other technology to try to corner the market. Meta has said it expects operating losses for Reality Labs, the division working on its hardware offerings, to grow even bigger in 2023.
Last month, the company unveiled a $1,500 VR headset that it says will transform the ability of workers to collaborate with colleagues and conduct their jobs.
But so far, that vision has been slow to materialize, in part, because the company is still developing the underlying technology and wider range of applications that would make it appealing to mainstream audiences. While the company currently dominates the VR headset market, Meta is likely to face significant competition in the space from Apple.
Meta operates social media platforms Facebook and Instagram and the messaging app WhatsApp, among other initiatives. The more traditional business model for its blue app, which relies on advertising, has been hit particularly hard by larger economic challenges, including some digital advertisers who pulled back on spending as rising inflation and Russia’s invasion of Ukraine created market instability.
At the start of the covid-19 pandemic, more retailers and shoppers flocked to e-commerce, which increased Meta’s revenue — a trend Zuckerberg said he thought would become permanent even after vaccines became accessible and social restrictions eased. That didn’t turn out to be true, he 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,” he said. “I got this wrong, and I take responsibility for that.”
The company is increasingly fending off competition for marketing dollars and users from upstart rivals such as TikTok, the short-form video platform that has taken off among younger generations. This year, the company reported that Facebook lost daily users for the first time in its 18-year history, though user growth later recovered. Last month, Meta reported that its second quarterly revenue decline in a row.
And Meta has estimated that it will have lost $10 billion this year after Apple introduced privacy restrictions that forced app makers such as Facebook to explicitly ask users if they could collect data about their activity on the internet, hurting the social media company’s ability to facilitate targeted advertising campaigns. Facebook argued at the time that the new privacy rules would hurt small businesses who need granular information about users to find probable customers.
In the face of those challenges, Meta executives have been increasingly warning employees that the company was entering a new era of higher performance expectations and more focus on its biggest goals.
During a recent call with investors, Zuckerberg touted the company’s decision to mimic the same strategy that has made TikTok so popular: showing users entertaining content from strangers over posts from their friends and family. The company is also heavily promoting its short-form video product, Reels, on Instagram and Facebook as well as business messaging.
During the same call, Facebook said it plans to slow hiring dramatically and hold its head count next year to be roughly the same as it is now.
More than a month ago, Meta said it would stop making new offers to job candidates, sourcing candidates and approving internal transfers while the company reevaluated how best to prioritize its staffing resources, according to a memo posted to the company’s internal message board viewed by The Washington Post. Zuckerberg said Wednesday the company would extend its hiring freeze through the first quarter of 2023 “with a small number of exceptions.”
This past summer, Lori Goler, the company’s top HR director, advised managers to implement the “rigorous performance management” practices that Meta relied on before the pandemic, such as giving critical feedback to struggling employees.
In July, Meta’s head of engineering, Maher Saba, instructed engineering managers in an internal memo to identify and weed out their lowest-performing employees.
“If a direct report is coasting or is a low performer, they are not who we need; they are failing this company,” Saba wrote. “As a manager, you cannot allow someone to be net neutral or negative for Meta.”
Such messages from company executives created a wave of anxiety and resentment among Facebook’s workforce. Some have worried they could lose their jobs or see their annual bonuses reduced. Others are concerned that an already rigorous corporate environment will grow even more competitive as employees jockey for fewer coveted positions, The Post has reported.
Source by www.washingtonpost.com
