Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees Wednesday, reports CNBC.
"Today I’m sharing some of the most difficult changes we’ve made in Meta’s history," Zuckerberg said in the letter. "I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1."
Meta laying off more than 11,000 employees: Read Zuckerberg’s letter announcing the cuts (CNBC)
Excerpt from CNBC: The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm guidance in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%. Investors have been concerned about Meta’s rising costs and expenses, which jumped 19% year over year in the third quarter to $22.1 billion. The company’s overall sales declined 4% to $27.71 billion in the quarter while its operating income dropped 46% from the previous year to $5.66 billion. Zuckerberg said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people in 2023. "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."
According to Yahoo Finance, Meta’s recent mass layoff marks a turning point for a company whose business model once seemed untouchable despite years of controversies over privacy and Russian election interference.
"The company literally has one foot in one direction, which is the metaverse, and another foot in short form video trying to compete with TikTok, and it's not doing either particularly well at the moment," Forrester Research Director Mike Proulx told Yahoo Finance.
How Meta went from a trillion-dollar company to mass layoffs (Yahoo Finance)
Excerpt from Yahoo Finance: While some might blame Meta’s fall on CEO Mark Zuckerberg’s obsession with the immersive online world known as the metaverse, that’s only one factor that helped send its stock price plummeting 70% in the last year. Other major blows include the rise of short-form video platform TikTok, Apple privacy changes that hurt advertising revenue, and a lack of Gen Z users. Meta faces threats from both its own aging user base and the rise of TikTok, a Chinese app with more than 1 billion monthly active users. The weakened economy is also hammering Meta, which generates the vast majority of its revenue through online advertising. One of the first line items companies cut as part of their cost-savings measures is their ad budgets — directly impacting Meta’s bottom line. While Meta will cut costs by axing workers, Proulx said the company also has to rebuild its business plan if it wants to ramp up momentum.
Meanwhile, two weeks after Elon Musk completed his acquisition of Twitter, the future of the company has never looked less certain, writes CNN.
A day of chaos brings Twitter closer to the brink (CNN)
Excerpt from CNN: In the past week alone, one of the world’s most influential social networks has laid off half its workforce; alienated powerful advertisers; blown up key aspects of its product, then repeatedly launched and un-launched other features aimed at compensating for it; and witnessed an exodus of senior executives. The wild swings at Twitter only seemed to accelerate on Thursday with more executive departures, growing chaos over fake, verified accounts and an unusual public rebuke from the US government. Twitter now appears to be on the brink, a point Musk himself seemed to concede on Thursday by reportedly telling employees that bankruptcy could be on the horizon (though it’s far from the first time he’s warned about bankruptcy at one of his companies). It’s a stunning reversal of fortunes not just for Musk, who bought the company for $44 billion, but also for a platform used by some of the most powerful people on the planet, including world leaders, CEOs, and the Pope.
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