Facebook: Zuckerberg lays off en masse, the sinking of Meta continues

Facebook: Zuckerberg lays off en masse, the sinking of Meta continues

We know that the health of Meta (Facebook) is a little complicated at the moment, especially with the financial abyss represented by the Metaverse and the lack of progress on the subject. But obviously it’s even more dramatic than expected. Indeed, sad news for many employees, we have just learned that the company has just laid off 13% of its staff, or more than 11,000 employees. A colossal number.

Facebook in bad shape

To present the situation, Zuckerberg wrote a long letter to justify this rather brutal choice.

Today, I’m sharing some of the toughest changes we’ve made in Meta’s history. I have decided to reduce the size of our team by approximately 13% and let over 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner, more efficient business by reducing discretionary spending and extending our hiring freeze through the first quarter.

It should be said that investors worried about the rising costs and expenses of Meta (Facebook), which jumped 19% year-over-year in the third quarter to reach $22.1 billion. At the same time, Meta’s overall sales were down 4% year-on-year while its operating profit fell 46% from a year earlier. And that’s not counting the 20% drop in shares in recent weeks.

Zuckerberg admits his failure in his letter:

At the onset of Covid, the world quickly moved online and the rise of e-commerce led to outsized revenue growth. Many people predicted that it would be a permanent acceleration that would continue even after the pandemic was over. I, too, have therefore taken the decision to considerably increase our investments. Unfortunately, it didn’t go as I expected. Not only has online commerce returned to earlier trends, but the macroeconomic downturn, increased competition, and loss of ad signal has caused our revenue to drop from what I expected. I was wrong and I take responsibility for it.

In this new environment, we need to become more capital efficient. We’ve shifted more of our resources to fewer high-priority growth areas, like our AI discovery engine, our advertising and commerce platforms, and our long-term vision for the metaverse. We have reduced costs across our business, including reducing budgets, reducing benefits and reducing our real estate footprint. We are restructuring the teams to be more efficient. But these measures alone will not bring our spending in line with our revenue growth, so I also made the difficult decision to let people go.

Facebook confirms, however, to pay as “severance pay” 16 weeks of base salary plus two additional weeks for each year of service. So that employees can turn around and find a new job in a serene way. They will also be able to be accompanied in this search by the company.

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