Meta is set to lay off 13 percent of its staff in an effort to become a leaner and more efficient company. CEO Mark Zuckerberg, in a letter to employees, on Wednesday highlighted this as some of the most difficult changes the management has made in Meta's history.
"I have 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."
Zuckerberg explained that Meta is transitioning to desk sharing for people who already spend most of their time outside the office. "We'll roll out more cost-cutting changes like this in the coming months."
The employees will receive 16 weeks pay plus two additional weeks for every year of service, and Meta will cover their health insurance for six months.
Tough Time for Meta
The Facebook parent company has been having a tough 2022 and saw its shares sink nearly 20% in late October. Investors have expressed concerns about the company's rising costs and expenses, which surged 19% year-over-year in the third quarter to $22.1 billion. Meta's overall sales took a hit by 4% to $27.71 billion in the quarter, and its operating income fell by 46% from the previous year to $5.66 billion.
As such, Zuckerberg said Meta is making reductions in every organization. He pointed out that recruiting will be disproportionately affected as the company plans to hire fewer people in 2023. "The company extended its hiring freeze through the first quarter with a few exceptions," the CEO said. "This is a sad moment, and there's no way around that. To those who are leaving, I want to thank you again for everything you have put into this place."
Ambitious on Metaverse
Despite the metaverse being in the nascent phase, Meta is very much ambitious about it and is heavily investing in it. So far, it has cost the company $9.4 billion. Meta anticipates losses will grow significantly year-on-year. During a recent call with analysts as part of its third-quarter earnings report, Zuckerberg said Meta plans to focus its investments on a small number of high priority growth areas during the next year. "That means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year."
Meta expects to end 2023 with either roughly the same size, or even as a slightly smaller organization.