Social

Meta confirms 11,000 layoffs, amounting to 13% of its workforce

Comment

Facebook and Meta logos
Image Credits: Chesnot / Getty Images

Facebook, Instagram and WhatsApp’s parent company Meta has confirmed a huge round of layoffs, amounting to 13% of its workforce.

“I want to take accountability for these decisions and for how we got here,” CEO and co-founder Mark Zuckerberg wrote in a statement. “I know this is tough for everyone, and I’m especially sorry to those impacted.”

The news comes as companies from across the technological spectrum have announced huge swathes of redundancies in recent months, with Twitter laying off some half of its 7,500 workforce in the wake of Elon Musk’s arrival at the helm, while Stripe last week revealed plans to cut its headcount by 14%. And just yesterday, Salesforce confirmed it had laid off “hundreds” of workers.

Meta’s round of layoffs was widely rumored and expected, but we now know the full extent of the company’s plans, and what this will mean for those impacted.

Meta’s current headcount equates to around 87,000 around the world, meaning that 11,000 people will be leaving Meta. According to Zuckerberg, each U.S.-based employee will receive 16 weeks of severance pay, plus two extra weeks for each year of service. So for example, someone who has worked at Meta for four years will effectively get six months’ pay.

On top of that, Meta said that workers will also be paid for all remaining unused time off and receive stock-based compensation that was vesting through November 15. Additionally, health insurance for employees and their families will be offered for six months.

Outside the U.S., Zuckerberg said that support packages “will be similar,” but tailored for each market.

Meta-morphic

Meta’s path to where it finds itself today is a familiar one shared by countless companies over the past year, though the tech titan’s effects are amplified somewhat by virtue of its size.

After becoming one of the few companies ever to hit a trillion-dollar market cap — right in the middle of the pandemic — the company sought a new direction in the form of the metaverse, rebranding from Facebook to Meta in the process. While it would be unfair to apportion blame for Meta’s current predicament to this pivot, the company has been throwing a lot of money at a project that is nowhere near ready for prime time, with critics arguing that it was losing focus of its core business in pursuit of something that is a long way off from happening, if it happens at all.

Meta’s market cap has plummeted over the past year to around $250 billion today, a figure the company last experienced in 2015 when it was on a major ascendency. The company posted its first-ever quarterly decline back in June, before confirming it was freezing its hiring plans as part of broader cost-cutting measures, with its revenue dip continuing into the following quarter too.

What’s notable, perhaps, is that Zuckerberg barely acknowledges the metaverse at all in his open letter, aside from affirming that it’s a “long-term vision” that remains one of its “high priority growth areas.”

Certainly, there is little sign here that ye olde Meta ship — under Zuckerberg’s stewardship — will be changing course any time soon. He did say redundancies will impact employees at “Family of Apps” (i.e. Facebook, Instagram and WhatsApp) as well as Reality Labs, the VR and AR unit pushing its metaverse mission, but it’s not clear which divisions will be hit most: “some teams will be affected more than others,” Zuckerberg stated.

In a separate SEC filing accompanying today’s announcement, Meta said that it expected Reality Labs’ operating losses in 2023 to “grow significantly year-over-year” — a sign, perhaps, that Meta is continuing full-throttle on the metaverse amid a capex plan for 2023 that is still in the range of $34-$37 billion.

The Great Reset

In truth, a combination of factors have contributed to Meta’s decline. Apple’s App Tracking Transparency (ATT) framework, which rolled out last year, has hit Meta’s advertising revenue as the company predicted it would, with Apple’s own ads business benefiting as a result. And the rise of relative newcomers such as TikTok has also influenced where advertisers choose to spend their money.

But the elephant in the room here is the impact of the so-called Great Reset, a phenomenon we’ve seen in countless other places where companies that went in too deep off the back of a pandemic-driven surge in revenues were brought back down to Earth with a jolt when the boom subsided. And this is precisely where Mark Zuckerberg says Meta went wrong too, compounded by the broader economic downturn.

“At the start of Covid, the world rapidly moved online and the surge of ecommerce led to outsized revenue growth,” Zuckerberg wrote. “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.”

Other changes

Layoffs aside, Meta also said that it’s reviewing its infrastructure spending to optimize its capacity efficiency, while it’s looking to “shrink its real estate footprint,” which will involve more desk-sharing for those who only visit an office occasionally. Moreover, its current hiring freeze will extend into early 2023, with only a “small number of 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,” Zuckerberg wrote. “This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.”

More TechCrunch

Jolla has taken the official wraps off the first version of its personal server-based AI assistant in the making. The reborn startup is building a privacy-focused AI device — aka…

Jolla debuts privacy-focused AI hardware

OpenAI is removing one of the voices used by ChatGPT after users found that it sounded similar to Scarlett Johansson, the company announced on Monday. The voice, called Sky, is…

OpenAI to remove ChatGPT’s Scarlett Johansson-like voice

Consumer demand for the latest AI technology is heating up. The launch of OpenAI’s latest flagship model, GPT-4o, has now driven the company’s biggest-ever spike in revenue on mobile, despite…

ChatGPT’s mobile app revenue saw biggest spike yet following GPT-4o launch

Dating app maker Bumble has acquired Geneva, an online platform built around forming real-world groups and clubs. The company said that the deal is designed to help it expand its…

Bumble buys community building app Geneva to expand further into friendships

CyberArk — one of the army of larger security companies founded out of Israel — is acquiring Venafi, a specialist in machine identity, for $1.54 billion. 

CyberArk snaps up Venafi for $1.54B to ramp up in machine-to-machine security

Founder-market fit is one of the most crucial factors in a startup’s success, and operators (someone involved in the day-to-day operations of a startup) turned founders have an almost unfair advantage…

OpenseedVC, which backs operators in Africa and Europe starting their companies, reaches first close of $10M fund

A Singapore High Court has effectively approved Pine Labs’ request to shift its operations to India.

Pine Labs gets Singapore court approval to shift base to India

The AI Safety Institute, a U.K. body that aims to assess and address risks in AI platforms, has said it will open a second location in San Francisco. 

UK opens office in San Francisco to tackle AI risk

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

24 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

3 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

3 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake