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Meta, the parent company of Facebook, is laying off 11,000 people, about 13% of its workforce, as it grapples with low revenue and broader problems in the tech industry, CEO Mark Zuckerberg said in a letter to employees on Wednesday.
The job cuts come just a week after a slew of layoffs at Twitter under new owner billionaire Elon Musk. There have been multiple job cuts at other tech companies that have been quick to hire during the pandemic.
Zuckerberg also said he made the decision to hire aggressively, anticipating rapid growth even after the pandemic ends.
“Unfortunately, this did not play out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online sales returned to previous trends, but the macroeconomic downturn, increased competition and the loss of advertising signal have resulted in our revenue being much lower than I expected. I made a mistake and I am responsible for it.”
Meta, like other social media companies, has seen a financial boost in the era of pandemic lockdowns as more people stayed home and scrolled through their phones and computers. But when the quarantine measures ended and people started going out again, income growth started to slow down.
The economic downturn and a bleak outlook for online advertising — by far Meta’s biggest source of revenue — contributed to Meta’s woes. Meta posted its first-ever quarterly revenue decline this summer, followed by another, more significant decline in the fall.
Some of the problems are company-specific, while others are related to broader economic and technological factors.
Twitter laid off about half of its 7,500 employees last week, part of a chaotic overhaul since Musk took the helm. He tweeted that he had no choice but to cut jobs “when the company is losing over $4 million a day,” though he did not provide details on the losses.
Meta has raised concerns among investors by pouring more than $10 billion a year into the “meta universe” while shifting its focus away from social media. Zuckerberg predicts that the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are bracing for a potential recession. There’s also the issue of Apple’s privacy tools, which make it harder for social media platforms like Facebook, Instagram and Snap to track people without their consent and target them with ads.
Competition from TikTok is also a growing threat as young people flock to the video-sharing app over Instagram, which Meta also owns.
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