Mark Zuckerberg has announced massive layoffs at Meta. Some 13% of employees are set to lose their jobs amid increasing costs and decreased revenues.
Over the past year, Meta, which owns Facebook, Instagram and WhatsApp, has experienced struggles with Zuckerberg’s investment into the “metaverse,” a virtual reality world that the billionaire CEO believes will serve as the next stage of digital communication.
Despite developing a host of hardware, software, and servers to maintain the service, the metaverse, which Meta hopes to deliver through its app “Horizon Worlds,” has failed to garner much interests. Analysts criticized Zuckerberg for tripling the company’s payroll from 25,000 people to over 85,000 in the past four years.
Writing to employees on Wednesday, Zuckerberg announced that the firm will cut around 11,000 staffers and extend the ongoing hiring freeze.
“In this new environment, we need to become more capital efficient,” he wrote. “We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”
All affected employees will be given 16 months of base pay plus two additional weeks for each year of service without limit and healthcare coverage for the next six months.
“I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate,” Zuckerberg added. “For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months.”
News of the layoffs prompted the company’s stock price to surge by 7% on Wednesday morning.