Meta Eliminates Over 11,000 Jobs, Marking First Layoffs in Its 18-Year History

The significant layoffs that Meta CEO Mark Zuckerberg warned of during the company’s third-quarter-2022 earnings call in October have arrived, and it’s not pretty. Zuckerberg said in a note to employees early Wednesday, shared in the Meta newsroom, that more than 11,000 of its 87,000-plus employees were laid off, marking the first headcount reductions in the company’s 18-year history as Facebook and Meta. He said the cuts are occurring across both Meta’s family of applications and Meta Reality Labs, but some teams will be affected more than others, singling out recruiting, as the company plans fewer hires in 2023. Meta said in an 8-K filing with the Securities and Exchange Commission Wednesday that it lowered its projected overall expenses for 2023 from its previous range of $96 billion to $101 billion to a new figure of $94 billion to $100 billion due to the effects of reduced hiring. Forrester vice president and principal analyst J.P. Gownder told Adweek, “Some tech companies have already laid off workers, like Twitter, Intel, Salesforce, Microsoft and Zendesk, among others. It's a good bet that tech companies that haven't yet laid off employees are carefully considering whether or not to do so. It wouldn't be surprising to see more layoffs in the next few months, particularly among firms whose fiscal year ends Dec. 31. They want to set up finances for success in 2023. Widespread economic concerns—some prompted by rising interest rates, others by the war in Ukraine, high fuel costs and supply chain issues—are prompting these moves in anticipation of lower demand.” Zuckerberg explained Wednesday’s moves in his note, writing, “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. At the start of Covid, the world rapidly moved online, and the surge of ecommerce 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. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.” He continued, “In this new environment, we need to become more capital-efficient. We’ve shifted more of our resources onto a smaller number of high-priority growth areas—like our artificial intelligence discovery engine, our ads and business platforms and our long-term vision for the metaverse. 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.” Thomas Walters, founder and CEO of global creative agency Billion Dollar Boy, told Adweek, “Ahead of the upcoming cookie phaseout next year, a lot of Meta’s competitors have been investing resources into new ways to acquire user data as these changes take shape. TikTok, for example, is exploring ways of circumventing Apple's prohibitive changes to code audits and user activity tracking. Brands, too, are preparing for the shift in data privacy restrictions, investing increasingly in creating digital loyalty programs that are fully ingrained and crucial to receiving previously widely shared discounts—every supermarket now has one, McDonald’s now has one—as do many others. This is where the evolution of the internet is going, a more sustainable approach in the short- to medium-term than Meta’s strategy to gamble all on the rapid adoption of virtual reality." Forrester vp and research director Mike Proulx added, “Meta is amidst an identity crisis. The company has one foot in a risky long-term metaverse bet and another foot failing to compete with TikTok. Neither bodes well for Meta in the short-term, and more severe cost-cutting measures were inevitable as the company attempts to regroup heading into a bleak 2023. Expect more headwinds for Meta as Generation Z continues to exit Facebook and favor TikTok over Reels, and chief marketing officers consolidate their slashed media budgets toward safe and sure bets.” Zuckerberg said affected employees in the U.S. will receive: 16 weeks of base pay, plus two additional weeks for every year of service, with no cap; payment for all remaining personal time off; all impacted will receive their Nov. 15, 2022, vesting; the cost of healthcare for people and their families will be covered for six months; three months of career support will be provided with an external vendor, including early access to unpublished job leads; and dedicated immigration specialists will help those who are in the country on a visa. He added that similar support will be extended to those outside of the U.S. Zuckerberg also detailed cost-cutting measures such as slashing the company’s real estate footprint and desk sharing for people who spend more time outside of the office, and he said the company’s hiring freeze is being extended through the first quarter of 2023, with a small number of exceptions. He wrote, “This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions. To those who are staying, I know this is a difficult time for you, too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to make sure our future is strong." Walters told Adweek, “News of redundancies at Meta is terrible for those staff affected. But, while Meta may argue that a lot of the staff it employs are on fixed-term contracts and had been expected to depart, the scale and the timing suggest otherwise. Following its recent, underwhelming financial results, the redundancies look increasingly like the unfortunate side effect of the enormous $10 billion-plus investment in a vision of the metaverse that people don’t yet understand.”

Leadership & Talent

Meta Eliminates Over 11,000 Jobs, Marking First Layoffs in Its 18-Year History

The company is also reducing its real estate footprint, implementing desk sharing for people who spend more time outside of the office

David Cohen

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David Cohen