Meta, Facebook’s parent, is shrinking for the first time in its 18-year history history, axing 11,000 jobs, representing 13% of headcount, cutting discretionary spending and extending a hiring freeze.
Founder Mark Zuckerberg: “This is a sad moment, and there’s no way around that.”
The move to a “leaner and more efficient” company adds to the avalanche of cuts across digital and social media companies seeing a dip in business following a pandemic surge.
Advertising spend is slowing in the face of an economic downturn, marked by racing inflation, war in Europe and supply chain issues.
Meta also faces increasing competition from newer players including TikTok, and advertising targeting issues from Apple’s decision giving its users the option of tracking.
Zuckerberg: “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 e-commerce 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.”
Those losing their jobs get 16 weeks of base pay plus two additional weeks for every year of service. All will get stock options which vest November 15.
The move to a leaner company was foreshadowed when Meta announced September quarter results.
Then it announced expense cuts and and a freezing of headcount after reporting a 4% drop in revenue to $US27.714 billion.
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