Zuck admits biz recruited too hard during pandemic and decline in advertising forced his hand
Meta is making more than of 11,000 employees redundant following the dramatic decline in profits and the subsequent share price dive at the end of last month.
In a post made public this morning after being shared with the workforce, company chief Mark Zuckerberg said the layoffs were the „most difficult change we’ve made in Meta’s history.“
He added:
The social media corporation – home to Facebook, Instagram, and WhatsApp – last month reported revenue of $27.7 billion, down 4 percent year-on-year, but profit plunged 52 percent to $4.4 billion.
Weaker advertising demand was blamed, „impacted by the uncertain and volatile macroeconomic landscape,“ said CFO David Wehner in late October.
Meta is suffering at the hands of Apple’s privacy focused tweaks to its operating system, with Meta estimating earlier this year that the iOS privacy change will cost it $10 billion.
Although it was barely mentioned in the missive, there is also the issue of Meta’s metaverse division, which its latest quarterly earnings report revealed has lost $9.4 billion this year already.
The jobs cuts are perhaps partly a consequence of the hiring spree that Meta and others in the industry embarked upon during the pandemic. Meta, for example, employed more than 58,000 in 2019 but the headcount had increased to 87,000 by calendar Q3.
The buck for the job cuts stops with Zuck, he said in his blog post this morning – who else he thought it might have stopped with isn’t clear.
„At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth.
