Facebook owner Meta declares a hiring freeze through the first quarter of 2023 and fires 13% of its employees.

 

On Wednesday, Meta said that it would let go 13% of its personnel, or roughly 11,000 workers. The business also disclosed that it would prolong the employment ban until Q1.

Employees at the company’s family of apps and Reality Labs will be affected by personnel reductions, according to Meta CEO Mark Zuckerberg in a direct message.

The action was taken a week after Twitter’s new owner, billionaire Elon Musk, laid off a large number of employees.

Because more individuals stayed at home and read on their phones and laptops during the pandemic lockdown period, Meta, like other social media sites, benefited financially. However, as the lockdowns ended and people resumed venturing outside, the growth of revenue slowed.

The business revealed the reason for the downsizing in a post headlined “Mark Zuckerberg’s letter to Meta employees,” citing a macroeconomic slump, greater competition, and a loss of advertising signal.

The corporation also said that for each year of service, it will pay out 16 weeks of base salary plus an additional two weeks of pay.

Additionally, Meta will offer its employees career advice, six months of health insurance, and immigration support.

The cuts occur at a time when investors are pressuring Zuckerberg to reduce spending. According to the company’s post, Meta will concentrate on growing markets like AI discovery engines, advertisements, and business platforms.

The downturn in the economy and the unfavourable forecast for internet advertising, by far Meta’s largest source of income, have added to the company’s problems. This past summer, Meta recorded its first-ever quarterly sales decrease, which was followed by a larger decline in the following season.

About half of Twitter’s 7,500 employees were let go last week as part of a chaotic reorganisation following Mr. Musk’s appointment as CEO. Despite not mentioning specific losses, he stated that there was no other option than to eliminate the positions “when the company is losing over $4M/day.”

Meta has worried investors by pouring over $10 billion a year into the “metaverse” as it shifts its focus away from social media. CEO Mark Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Meta and its advertisers are bracing for a potential recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.