In a letter, Zuckerberg pointed out that the ‘macroeconomic crisis, increased competition and loss of advertising signal’ contributed to the measure.
Meta announced, this Wednesday (9), the dismissal of 11 thousand employees, which represents 13% of the global staff of the company in Brazil, the company did not respond about the cuts in the Brazilian unit. The measure is part of a restructuring aimed at cutting costs.
The layoffs were announced by Mark Zuckerberg, who called the move “one of the most difficult” ever made in Meta’s history. In addition, the executive informed that hiring at the company is suspended until the first quarter of 2023.
In one of the excerpts from the letter, Zuckerberg explains that the pandemic has heated up the e-commerce market, leading to considerable revenue growth. In the last report released so far, the company had more than 85,000 employees worldwide, with 27,000 being hired in the last two years.
“Unfortunately, this did not turn out as I had hoped. Not only did online trading return to previous trends, but the macroeconomic crisis, increased competition and loss of ad signal caused our revenue to be much lower than I expected. and I take responsibility for that,” he said.
Read Mark Zuckerberg’s letter in full:
‘Today, I’m sharing some of the toughest changes we’ve made in Meta’s history. I 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, cutting discretionary spending and extending our hiring freeze to Q1.
I want to take responsibility for these decisions and explain how we got here. I know it’s hard for everyone, and I’m sorry for those impacted.
How did we get here?
In the early days of Covid, the world quickly moved online and the wave of e-commerce led to higher revenue growth. Many people predicted that this would be a permanent acceleration that would continue even after the pandemic ended. Me too. So I made the decision to significantly increase our investments. Unfortunately, it didn’t turn out as I had hoped. Not only did online trading return to previous trends, but the macroeconomic crisis, increased competition and loss of ad signal caused our revenue to be much lower than I had expected. I made a mistake and I take responsibility for it.
In this new environment, we need to become more capital efficient. We’ve shifted more resources to fewer high-priority growth areas like our AI discovery engine, our advertising and business platforms, and our long-term vision for the metaverse. We reduced costs in our business, including resizing budgets, reducing benefits and reducing our real estate expenses. We are restructuring teams to increase our efficiency. But these measures alone will not bring our expenses in line with our revenue growth, so I also made the difficult decision to let people go.
How will this work?
There is no good way to make a dismissal, but we hope to get all the relevant information to you as soon as possible and then do what we can to support you through that.
Everyone will get an email soon letting you know what this layoff means to you. Thereafter, each affected employee will have the opportunity to speak with someone to have their questions answered and participate in information sessions.
Some of the US details include:
Indemnity: We will pay 16 weeks of base salary plus two additional weeks for each year of service, without limit.
Social Security Contributions: We will pay all the remaining time.
Vesting contract: all those impacted will receive until November 15, 2022.
Health insurance: We will cover the cost of health care for individuals and their families for six months.
Career Services: We will provide three months of professional support with an external provider, including early access to unheard of job leads.
Collaborators who came from other countries: I know this is especially difficult if you are here on a visa. There is a notice period before expiry and some grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration experts to help guide you based on what you and your family need.
Outside the US: Support will be similar, and we will follow up shortly with separate processes that take into account local employment laws.
We made the decision to remove access to Meta’s systems for people leaving today given the amount of access to confidential information. But we’re keeping email addresses active throughout the day so everyone can say goodbye.
While we are making reductions across organizations in both the Applications and Reality Family Labs, some teams will be affected more than others. Recruitment will be disproportionately affected as we plan to hire fewer people next year. We are also restructuring our business teams more substantially. This is not a reflection of the great work these groups have been doing, but what we need going forward. Leaders from each group will schedule time to discuss what this means for their team in the coming days.
The teammates who will leave us are talented and passionate, and they have made an important impact on our company and community. Each of you helped make Meta a success, and I am grateful for that. I’m sure you will continue to do great work elsewhere.
What other changes are we making?
I see layoffs as a last resort, so we decided to control other sources of cost before letting teammates go. Overall, this will add up to a significant cultural shift in the way we operate. For example, as we shrink our real estate spending, we are transitioning to desk-sharing for people who already spend most of their time away from the office. We will roll out more cost-cutting changes like this in the coming months.
We are also extending our hiring freeze to Q1 with a small number of exceptions. I will look at our business performance, operational efficiency and other macroeconomic factors to determine if and when we should resume hiring at this point. This will give us the ability to control our cost structure in the event of an ongoing economic crisis. It will also put us on a path to achieving a more efficient cost structure than we have outlined for investors recently.
I’m in the midst of a complete overhaul of infrastructure spending. As we build our AI infrastructure, we are focused on becoming even more efficient with our capabilities. Our infrastructure continues to be an important asset for Meta, and I believe we can achieve that for less.
Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected earlier this year, and we want to make sure we’re operating efficiently in both our Reality and Application Family Labs.
How are we going to move forward?
This is a sad time, and there’s no getting around it. To those who are leaving, I want to thank you again for everything you have put in this place. We would not be where we are today without your hard work, and I am grateful for your contributions.
For those staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we work closely with, but many of you also feel uncertain about the future. I want you to know that we are making these decisions to ensure that our future is strong.
I believe we are deeply underrated as a company today. Billions of people use our services to connect, and our communities continue to grow. Our core business is among the most profitable ever built with enormous potential ahead. And we are leading the way in developing the technology to define the future of social connection and the next computing platform. We do historically important work. I am confident that if we work efficiently, we will emerge from this crisis stronger and more resilient than ever before.
We will share more about how we will operate as a streamlined organization to achieve our priorities in the coming weeks. For now, I will say once again how grateful I am to those who are leaving for all they have done to advance our mission.
Mark’
(Crdito: Dima Solomin on Unsplash)
