Meta, the parent company of Facebook and Instagram, on Wednesday announced it is cutting over 11,000 jobs.
CEO Mark Zuckerberg said “this is a sad moment” and described the cuts as one of the “most difficult changes” they’ve had to make in Meta’s history.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted,” he said in a message to employees that was also posted online.
Zuckerberg said he wrongly estimated that the revenue growth the company saw during the height of the COVID-19 pandemic would continue, and therefore grew the company’s investments.
“Unfortunately, this did not play out the way I expected,” he said. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”
He said each employee will receive an email describing how they are affected by the announcement.
Zuckerberg had previously signaled job cuts were on the way as the company was facing headwinds from declining digital advertising revenue and stiff competition from TikTok. Besides, the company has made a massive investment in the metaverse, which at least for now has no clear path to profitability.
In October, the company reported its second-ever quarterly revenue drop, according to The Washington Post.
In a call with investors following those earnings, Zuckerberg defended his bet on metaverse.
“It would be a mistake for us to not focus on these areas which I think will be fundamentally important to the future,” he said. “I think that our work here is going to be of historic importance and create the foundation for an entirely new way that we will interact with each other.”
Zuckerberg on Wednesday said the company will continue to focus its resources on the metaverse along with its other main priorities — its artificial intelligence discovery engine, as well as advertising and business platforms.
He added that the company will extend its hiring freeze until the first quarter of 2023 — with limited exceptions.
Tech companies have been struggling. The ride-hailing platform Lyft announced last week that it is slashing 13% of its staff, citing economic challenges, while payments processing company Stripe said it is reducing its workforce by 14%. Amazon announced it is freezing “new incremental hires in our corporate workforce” for at least the next few months.