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| Meta announces the layoffs of 11000 workers |
Meta CEO Mark Zuckerberg announced the mass layoffs in a letter to employees at the company on Wednesday, confirming information released over the past few days.
Zuckerberg said META will lay off more than one in 10 employees: “Today I want to share with you some of the toughest changes we've made in META's history,” he wrote in the email.
He added, “I have decided to downsize our team by approximately 13% and lay off more than 11,000 talented people. We've also taken some additional actions: extending the schedule to the first quarter and making the company leaner and more efficient. "
Meta shares rose 4% in pre-market trading after Zuckerberg's announcement.
The layoffs come at a difficult time for Meta, part of Facebook, Instagram, WhatsApp and others, after it issued poor guidance for its current fourth-quarter results in late October, which spooked investors and sent its share price down 20%.
Investors have been worried for some time about rising costs and prescriptive fees, which rose 19% year over year to $22.1 billion in the third quarter. Meta's total revenue declined 4% year-over-year to $27.71 billion in the third quarter, while operating income declined 46% year-over-year to $5.66 billion.
As Zuckerberg said in his letter, "I want to take responsibility for these decisions and what brought us here. I know it has been difficult for everyone and I am especially sorry for those involved."
Zuckerberg said Meta is laying off workers at each of its companies, but hiring at all companies will be disproportionately affected as the company plans to cut hiring in 2023. Zuckerberg said the company extended the hiring freeze into the first quarter with a few exceptions.
Zuckerberg added, "It's a sad and inevitable time. For those who left, I want to thank you once again for all they've done for this place."
Zuckerberg explained that affected employees will receive 16 weeks of pay, plus an additional two weeks for each year worked. Meta takes over health insurance for six months.
Meta is investing heavily in the Metaverse, an immature virtual world that can be accessed through virtual and augmented reality goggles. This massive gamble has cost Meta more than $9.4 billion by 2022, and the company expects losses to grow exponentially every year.
Notably, as of September last year, Meta's total workforce is more than 87,000 workers.