Meta will lay off more than 11,000 employees, CEO Mark Zuckerberg told workers in a message on Wednesday.
The layoffs will reduce the company’s workforce by about 13%, according to Meta, the parent company of Facebook, Instagram and WhatsApp.
“I want to take accountability for these decisions and for how we got here,” Zuckerberg told employees. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
The layoffs will affect what are known as the company’s “Family of Apps” — Facebook, Messenger, Instagram and WhatsApp — and the virtual reality business Reality Labs, Zuckerberg said. They will also affect Meta’s business teams, which are being restructured, he said, adding that the company plans to hire fewer people next year and is extending their hiring freeze into the first quarter of next year “with a small number of exceptions.”
Zuckerberg said the development follows his decision to “significantly increase our investments” at the start of the pandemic.
He told employees he made that decision based on the belief that e-commerce would continue to grow and provide a strong source of revenue post-pandemic — a prediction that turned out to be wrong, he said.
“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,” he said. “I got this wrong, and I take responsibility for that.”
The announcement also comes amid investor skepticism about the company’s focus on growing the Metaverse, a virtual world environment that Zuckerberg has said represents the future of the internet. Zuckerberg announced the creation of the Facebook parent company a year ago.
Meta shares were down 26% soon after news of the layoffs broke Wednesday morning, continuing a 2022 freefall.
While revenue fell 4% in the third quarter, Meta’s costs and expenses rose 19% year over year to $22.1 billion, CNBC reported last month. Operating income declined 46% from the previous year to $5.66 billion and the company’s overall net income was down 52% to $4.4 billion last quarter, according to CNBC.
The company has said that it had 197 million daily active users in the U.S. and Canada in the third quarter, up from 196 million during the same quarter in 2020. Meta derives the bulk of its revenue from users in North America.
The layoffs also follow other cost-cutting measures, including “scaling back budgets, reducing perks, and shrinking our real estate footprint,” Zuckerberg said, adding that additional measures will be forthcoming.
Affected employees in the U.S. will receive 16 weeks of severance pay plus two additional weeks for every years they’ve been at the company; payment for their remaining paid time off; six months of health insurance; and immigration support for people on visas, he said.
Outside the U.S., support will be similar, Zuckerberg said, adding that the company will “follow up soon with separate processes that take into account local employment laws.”
Zuckerberg said the company removed affected employees’ access to most of the company’s systems “given the amount of access to sensitive information,” but that they would still have access to email throughout Wednesday to “say farewell.”
The layoffs also follow the prominent resignation of former Meta COO Sheryl Sandberg, who announced she was leaving the company in June after joining in 2008 and helping to transform it into a tech behemoth.
Zuckerberg’s net worth has fallen by more than $88 billion compared to last year, according to Bloomberg.
This is a developing story. Please check back for updates.
Rob Wile and Jonathan Vanian, CNBC contributed.
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