Meta CEO Mark Zuckerberg has told his staff he plans to cut 11,000 jobs. But despite the massive wave of layoffs, billions more would pour into the Metaverse.
It was already indicated: Facebook parent company Meta wants to lay off thousands of employees – 11,000 to be exact. CEO Mark Zuckerberg made this known in an official statement.
He therefore wants to take a number of follow-up steps to make Meta a leaner and more efficient company. Overall, however, about 13 percent of the total workforce will initially lose their jobs.
Meta: Hiring freeze until Q1 2023
In addition to the job losses, the American group has also imposed a hiring freeze. The company does not plan to hire new employees until the first quarter of 2023. Zuckerberg also explained to his staff how it came about.
Meta misjudged the pandemic
At the start of the pandemic, the world would have moved quickly online, Zuckerberg writes. Many people would have predicted that this trend would continue even after Covid ended.
I was also convinced of this and therefore decided to increase our investments considerably. Unfortunately, it didn’t turn out the way I expected.
However, the opposite was the case. Meta saw even less revenue due to a macroeconomic slowdown, increased competition and losses in ad signals. “I was wrong and I take responsibility for that.”
Zuckerberg wants to further reduce costs
To cut costs, however, Zuckerberg does not just want to cut the jobs of the 11,000 employees. All in all, there will be a major cultural shift in the way the company works, writes the Meta CEO.
Exactly what these cuts will be will only become clear in the coming months. Zuckerberg will monitor Meta’s business performance, operational efficiency and other macroeconomic factors.
Despite budget cuts: $100 billion for the Metaverse
Meta has a report from a news agency Reuters will lose more than 70 percent of its value by 2022 alone. The company is currently valued at $256 billion. Previously it was over $1 trillion.
After the wave of layoffs, shares of Meta rose by as much as 8 percent. Investors would therefore welcome the company’s caution Reuters. However, it remains to be seen whether this trend will continue.
Because although Zuckerberg talks about having to cut costs, he still intends to continue investing heavily in the Metaverse. The company expects to spend up to $100 billion in 2023 alone, even though Zuckerberg says it will take a decade for the investment to pay off.
Meta pays severance pay for lost jobs for 16 weeks
As compensation, all affected employees will receive their base salary for 16 weeks and an additional two weeks for each year they work with the company. In addition, the company paid out the remaining vacation days and wants to help those affected to reorient themselves professionally.
Meta’s massive job cuts are not at all unexpected. The poor quarterly results had previously angered shareholders Reuters. In a recent open letter, an investor also described Meta’s spending as “oversized and appalling.”
Meta is not the first technology company to cut thousands of jobs. Twitter recently laid off half of its workforce.
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