Meta starts laying off a significant portion of its employees, numerous reports from US media suggest. The new episode of layoffs is the biggest in the tech company’s history. Facebook was founded in the year 2004 and in 2022, it renamed itself to 'Meta'.
This switch in name hinted at a major shift in the company's future plans and could also be one of the reasons why Meta is letting go of some of its employees. Meta will be sending out emails to employees during the early hours of Wednesday (Eastern Time). Reportedly, Meta CEO Mark Zuckerberg had a word with the company's executives ahead of announcing his plans to layoff.
Mark Zuckerberg took responsibility for the entire situation. The Meta CEO claimed that the circumstances formed partly due to his over-optimism for the growth of the company.
The inflated workforce was a direct result of it. Meta has been under the investor's scanner due to a weak financial outlook for both the current quarter as well as the upcoming year. Meta witnessed a sharp dip in stock price after it announced that it is expected to make losses next year due to its investments in emerging technology. Zuckerberg later assured investors that they will be rewarded in the future if they continue to invest in the company.
At the end of September, Meta had more than 87,000 employees across the globe. A reduction of 13 per cent will lead to the biggest round of layoffs this year, in the tech industry. Apart from Meta and Twitter, many other tech brands are on a path to trim their expenditures fanning recession fears.
Meta offices in India will also be impacted by the announcement made by Zuckerberg. We tried reaching out to some employees but they haven't received any intimation from the company, so far.
Meta is not the only tech company to have laid-off employees. Brands like Apple and Amazon have frozen their hiring process. Even Google's parent company Alphabet is planning to reduce hiring by 50 per cent. Twitter is one of the recent tech companies to let go of employees. After Elon Musk's takeover, the micro-blogging platform removed over 50 percent of its workforce, roughly 3,700 employees. The layoffs and lower-than-expected earnings are leading to suspicion of a recession in US.
Meta has offered a broad outline of the layoff process for both US employees and those who are based in other countries. The benefits will remain the same which include basic pay of 16 months, and continued health insurance for a period of six months. Employees will also be referred to jobs in other companies on high priority.
Zuckerberg has outlined some key aspects of the severance pay that will be offered to its employees. In his statement he said, "We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap."
In his statement, Zuckerberg acknowledges his mistakes in the past few years that led to the 'last resort' of firing over 11,000 employees. In his statement he claimed that Covid led to a massive spurt in revenue, which was expected to continue. However, growth flatlined with no improvements in revenue.
Meta had been struggling to achieve its advertising revenue targets mainly due to Apple's new privacy feature. This feature allowed Apple users to completely disable targeted ads, one of Facebook's biggest money makers.
This has been the biggest layoff in Meta's 18-year history. The company was founded in the year 2004 and for the most part, it has witnessed a fair amount of growth. However, the layoffs were preceded by weak financial outlook for next year and even the current quarter.
He took complete responsibility for the layoffs. He said in his statement, "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."
Mark Zuckerberg shared a statement on the firings during the early hours on Wednesday.
He said, "Today I'm sharing some of the most difficult changes we've made in Meta's history. I've decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1."
Meta has issued a statement claiming to have sacked 13 per cent of its entire workforce. The 13 per cent amounts to over 11,000 employees. The company has a total strength of over 87,000 employees.
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