Meta to begin layoffs today; Zuckerberg accepts blame for ‘missteps’

Thousands of Meta employees are set to lose their jobs, company CEO Mark Zuckerberg confirmed on Wednesday morning (India time).

He spoke to hundreds of executives and confirmed the reports that had already been doing the rounds, the Wall Street Journal reported. The layoffs are reportedly part of cost-cutting measures at the social-media giant following disappointing earnings and a drop in revenue.

Zuckerberg accepted blame for the company’s “missteps.” According to people present in the meeting, he said his over-optimism about growth had led to overstaffing, the WSJ reported.

Largest of the year in tech sector

The company is expected to lay off thousands of employees starting Wednesday—likely the largest of the year to date in the tech sector, said the report, citing industry sources.

According to the WSJ report, the terminated employees will receive at least four months’ salary, Meta’s head of human resources, Lori Goler, told the group. Zuckerberg reportedly mentioned recruiting and business teams as among those facing layoffs.

Also read: Facebook parent Meta Q3 revenue, profit decline

An internal announcement of the layoff plan is expected early on Wednesday (US Eastern time), reported Fox News. Following the meeting, company directors in numerous sections of the organization began notifying their subordinates of cuts and reorganizations.

Revenue slowdown and metaverse investment

Zuckerberg had warned employees in late September that Meta intended to slash expenses and restructure teams. The California-based company, which owns Facebook, Instagram, and WhatsApp, put a freeze on hiring, and the CEO said Meta expected a smaller headcount in 2023 than this year.

Inside Meta, employees were already seeking specifics about the coming layoffs, reported WSJ. The planned layoffs would be the first broad head-count reductions in the company’s 18-year history.

Meta reported more than 87,000 employees at the end of September. The cuts are expected to affect about 10 per cent of the company that aggressively hired through the COVID-19 pandemic.

Also read: What is ‘metaverse’ and why does Mark Zuckerberg want us to live in it?

The reductions reflect a sharp slowdown in digital advertising revenue, an economy on the brink of recession, and Zuckerberg’s heavy investment in the speculative virtual-reality venture “metaverse.”

Meta’s stock has fallen more than 70 per cent this year. The company has highlighted deteriorating macroeconomic trends, but its spending and threats to its core social-media business have also spooked investors.

Trend for social media cos

“This is obviously a different mode than we’re used to operating in,” Zuckerberg said in a Q&A session with employees in September. “For the first 18 years of the company, we grew quickly every year. And then, more recently, our revenue has been flat to slightly down for the first time. So, we have to adjust,” he said.

Growth for Meta has stalled amid stiff competition from TikTok. Besides, the Apple Inc. requirement that users opt into the tracking of their devices has curtailed the ability of social media platforms to target ads, reported WSJ.

Also read: Google takes on Meta, launches Imagen Video, its own text-to-video AI

Meta’s layoffs follow those at Twitter last week. The latter company cut roughly 50 per cent of its workforce following its takeover by Elon Musk. The billionaire said the moves were necessary to stem losses. He later asked some fired workers to return.

Snap Inc., parent of rival app Snapchat, is also scaling back. It said in August that it would eliminate 20 per cent of its workforce.

(With agency inputs)