The parent company of Facebook has shifted more resources to a smaller number of high priority growth areas such as the metaverse, ads, AI discovery engine, and business platforms to gain more capital efficiency
Zuckerberg announces lay off of more than 11,000 employees at Meta. (Credit: Nokia621/Wikimedia Commons)
Facebook’s owner Meta has announced its decision to lay off nearly 13% of the company’s workforce, a move that will impact more than 11,000 employees.
The job cuts are being done in every organisation across both family of apps (FoA) and reality labs. FoA includes Facebook, Instagram, Messenger, WhatsApp, and other services, while the reality labs unit is made up of Meta’s augmented and virtual reality (AR and VR) related consumer hardware, software, and content.
The social technology company also plans to reduce discretionary spending and prolong its hiring freeze through the first quarter of 2023 in an effort to become a leaner and more efficient business.
Meta founder and CEO Mark Zuckerberg said: “At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth.
“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments.
“Unfortunately, this did not play out the way I expected.”
Meta is expected to send an email regarding the layoffs to its affected employees and affirmed that they will be given the opportunity to get their queries cleared and attend information sessions as well.
The company’s US employees will receive severance payments for 16 weeks of base along with two additional weeks for each year of service, with no cap.
Besides, the benefits will include family health insurance for six months, three months of career support with an external vendor, as well as immigration support for employees on a visa.
The social technology firm has moved more of its resources onto a smaller number of high priority growth segments. These include ads, metaverse, artificial intelligence (AI) discovery engine, and business platforms to gain more capital efficiency, stated Zuckerberg.
The Facebook parent company is said to have reduced expenditure across its business, including scaling back budgets, increasing desk-sharing, and reducing its real estate footprint.
Recently, Meta reported a net income of $4.4bn for Q3 2022, which showcased a decrease of 52%, compared to $9.2bn in the same quarter of the previous year.