Facebook’s parent company Meta is to cut 11,000 jobs following a catastrophic drop in revenue.
The company’s CEO Mark Zuckerberg said in a note to staff that Meta had become overstaffed and “inefficient.” The job losses will be the first round of redundancies in the company’s history, and will affect one in eight staff.
In the post, Zuckerberg said Meta overinvested at the start of the COVID-19 pandemic, believing the increase in activity online would only increase after restrictions related to the pandemic were eased.
“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.”
Zuckerberg said Meta will continue to focus on its metaverse project, describing it as a “high-priority growth area” despite criticism. Research into the concept has upped R&D costs to $10 billion each quarter. The CEO also said the company will focus on artificial intelligence and advertising.
Meta, which also owns WhatsApp and Instagram, has seen its share price drop dramatically in recent months, from a peak of $379 in September 2021 to around $105 today. Zuckerberg was quick to point the finger at Apple for the loss in revenue. In 2021, Apple limited the amount of data Facebook could gather from its iPhone users, which made it more difficult for the social media site to sell effective advertising.
Although the scale of the redundancies is both massive and unprecedented for Meta, it is still far less severe than Twitter’s cuts last week. In a matter of weeks, Elon Musk’s company cut half of its total workforce.