Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees and CNBC reported. “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Zuckerberg said. “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.” Shares of Meta were up nearly 4% in premarket trading. The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm guidance in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%. Investors have been concerned about Meta’s rising costs and expenses, which jumped 19% year over year in the third quarter to $22.1 billion. Meta’s overall sales declined 4% year over year to $27.71 billion in the third quarter while its operating income dropped 46% from the previous year to $5.66 billion. Zuckerberg said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people in 2023. The company extended its hiring freeze through the first quarter with a few exceptions, Zuckerberg said. Impacted employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months. Meta is heavily investing in the metaverse, which generally refers to a yet-to-be developed digital world that can be accessed by virtual reality and augmented reality headsets. This hefty bet has cost Meta $9.4 billion so far in 2022, and the company anticipates that losses “will grow significantly year-over-year.”
