Facebook parent Meta slashes workforce by 11,000, Zuckerberg takes blame

Meta CEO Zuckerberg says post-Covid scenario didn't meet expectations

Facebook parent Meta Platforms is laying off 11,000 employees, or about 13 per cent of its workforce, as it battles faltering revenue and broader tech industry woes. This is the first major round of layoffs in the Menlo Park-headquartered social media giant’s history. This follows a big round of job cuts at Twitter soon after Elon Musk's $44-billion takeover. 

“The teammates who will be leaving us are talented and passionate, and have made an important impact on our company and community. Each of you has helped make Meta a success, and I’m grateful for it. I’m sure you’ll go on to do great work at other places," said Mark Zuckerberg, Meta's chief executive officer and one of the richest in the world, in a blogpost.

Meta has an estimated 300-400 employees in India. When contacted about the impact of the global decision on Meta employees working in India, the company said: “We are not providing details about specific team impact.” Sources said that further information on India job cuts may be made available on Thursday.     

The layoffs were announced days after Meta’s profits more than halved in the third quarter of the calendar year to $4.4 billion, from $9.2 a year ago. The social media company reported its revenue at $27.7 billion in Q3, against $29 billion in the same period last year. Its sales also declined by 4 per cent year-on-year.

So far this year, Meta’s stock is down nearly 70 per cent. But in early trade on Wall Street, the stock was up nearly 6 per cent (at 8.18 pm IST).

Those fired by Meta would get 16 weeks of their base salary as severance, plus two weeks for every year they worked at the company. It is also offering six months of health-care coverage, as well as three months’ career support with an external vendor, including early access to unpublished job leads, and immigration support. Packages will be similar outside the US, in keeping with local employment laws. 

“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,” Zuckerberg 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. I got this wrong, and I take responsibility for that,” he said. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

In contrast to Meta’s global business, net profit of Facebook India Online Services, the registered entity of Meta in India, more than doubled in FY22 to Rs 297 crore, from Rs 128 crore in the previous year. The company’s revenue, too, grew 56 per cent to Rs 2,323.9 crore, from Rs 1,485 crore in FY21, according to the financial statement shared by research firm Toffler. 

Meta will extend its hiring freeze through Q1 of 2023, with some exceptions.

"I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point," said Zuckerberg.

These layoffs would affect every team across the company.

"I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead," Zuckerberg said.

Big Techs, including Apple, Meta, Twitter, and Amazon, have been under pressure because of the ongoing economic slowdown in the US, Europe and other parts of the world. According to Crunchbase, a market research company, technology US-based companies have fired over 45,000 workers as of October 2022.

Recently, Twitter reduced its global workforce to half after being bought by Elon Musk. Its India workforce was severely hit.