Facebook’s parent company Meta cuts 11,000 jobs

Facebook’s parent company, Meta Platforms Inc., announced on Wednesday that it would let go 13% of its workforce, or more than 11,000 people.

The company’s value has been drastically reduced as a result of a collapsing advertising market and historically high inflation, leading to the mass layoffs.

As one of “a number of steps” to “become a leaner and more efficient company,” Chief Executive Officer Mark Zuckerberg wrote in a letter to his staff that layoffs were being considered.

In addition, the message on the business’ website on Wednesday mentions reducing office space, reducing discretionary spending, and extending a hiring freeze into the first quarter of the year to reduce costs.

After losing more than 70% of its value this year alone, Meta, once valued at more than 1 trillion dollars, is now only worth 256 billion.

In the third quarter, the company’s costs and expenses increased by 19% year over year to $22.1 billion.

In his message, Zuckerberg said that Meta aggressively hired during the pandemic to handle a spike in e-commerce and social media usage. However, this year saw a decline in online sales that brought it back to its pre-pandemic levels, and both consumers and advertisers cut back on their spending.

I made a mistake, and I accept responsibility for that, said Zuckerberg, adding that the company’s revenue is “much lower than I’d expected.”

Due to increased competition from more recent rivals like TikTok, Meta’s primary advertising revenue has taken a hit.

The layoffs at Meta also coincide with a risky and expensive wager on “the metaverse.” In the future, virtual and augmented reality headsets will be used to access a particular version of the Internet.

The company has lost 9.4 billion dollars as a result of its significant investment in the metaverse, and it expects that losses “will grow significantly year-over-year.”

Twitter, Microsoft, and Snap are just a few of the major tech companies that have cut thousands of jobs in addition to Meta.

Twitter announced significant layoffs last week when Elon Musk became the new owner of the business.

The price of Meta’s stock increased by more than 5% on Wednesday.