According to Reuters, Facebook’s parent company Meta announced that in order to respond to the surge in costs and weak advertising markets, the company will lay off 13%of officers, and more than 11,000 employees will leave.
It’s the first major layoff in Meta’s 18-year history and one of the largest in the U.S. this year. It comes on the heels of thousands of layoffs at other major tech companies, including Microsoft and Elon Musk’s Twitter.
“Not only has online commerce resumed its previous trend, but the macroeconomic downturn, increased competition and advertising losses have led to much lower revenues than we had anticipated.” Meta CEO Mark Zuckerberg said in a letter to employees, “I made a mistake, and I take responsibility for it.”
Zuckerberg emphasized the need for capital efficiency and said the company would shift resources to “high-priority growth areas” such as its artificial intelligence engine, advertising and commerce platform, and meta-universe projects.
Meta said that as part of the severance package, the company will pay 16 weeks of base salary plus an additional two weeks of salary for each year, as well as all remaining paid vacation time. In addition, employees will receive six months of medical expenses, and affected employees will be authorized on Nov. 15.
Meta also reportedly plans to cut discretionary spending and extend the hiring freeze through the first quarter. The company’s shares rose about 3% in pre-market trading, but its market capitalization has evaporated by more than two-thirds from its high.