More than 11,000 employees will be laid off from Meta, the company that runs the social media site Facebook. This is about 13 percent of the company’s total workforce. This is one of the big layoffs in tech companies this year. Meta is facing difficulties like increasing cost and weakness in advertisements.
The business of tech companies had grown rapidly during the pandemic and its impact was also visible on their valuations. The valuations of these companies have come down significantly this year due to rise in inflation and interest rates. META’s Chief Executive Officer, Mark Zuckerberg in a message to employees Told”Our revenue has been much lower than expected due to weak macroeconomic conditions, increased competition and reduction in advertisements. I have made a mistake and I take responsibility.” He said the company needs to channel its resources into areas with high growth potential such as AI, ads and Metaverse projects.
Employees to be laid off from the company will be given 16 weeks of base pay along with two additional weeks of base pay for each year of service. Apart from this, the company will also pay the healthcare cost for six months. meta The company said it plans to cut non-essential expenses as well as stop hiring by the first quarter of next year.
Meta had grown steadily over the years but at the beginning of this year it experienced a first drop in its users per day. This is the first time since the inception of the company that such a large number of employees are being laid off. “It’s a tough time and I expect to do more with fewer resources,” Zuckerberg told analysts. The business of big tech companies has been affected due to the economic slowdown. Because of this, the marketing budget is also being reduced. Amazon, one of the largest e-commerce companies, also announced a reduction in workforce this year. Zuckerberg has suffered heavily from the company’s rebranding and increased focus on the metaverse. This year his wealth has reduced by almost half.