Mark Zuckerberg, the CEO of Meta, announced significant layoffs on Wednesday that will affect about 11,000 employees, or 13% of the company’s workforce. Zuckerberg is extending the company’s hiring freeze through Q1 with a small number of exceptions, he said. “I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point.”
In response to the announcement, Meta stock rose 8%, bringing the year-to-date drop to 69%.
Late in October, Meta gave lackluster advice for its forthcoming fourth-quarter earnings, alarmed investors, and sent its shares down nearly 20%.
In the third quarter, the company’s costs and expenses increased by 19% year over year to $22.1 billion.
Meta had earlier informed hundreds of executives of the decision, adding that he was responsible for the company’s errors in overeagerly employing employees. The layoffs in the computer industry, which has been losing employees for several months due to increased borrowing prices, faster inflation, and weaker economic development, are probably some of the biggest this year. All teams will be impacted by the layoffs because Meta employs 87,000 employees.
Zuckerberg wrote in his letter to employees-
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. 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.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.” The letter continues here.
Meta’s plans going forward? Zuckerberg says, “I’m currently in the middle of a thorough review of our infrastructure spending. As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.”
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