CEO Zuckerberg Takes Responsibility for Overexpansion and Focuses on Core Areas
Meta Platforms is cutting 11,000 jobs, approximately 13% of its workforce, marking the first mass layoffs in the company’s 18-year history. The decision was made by CEO Mark Zuckerberg, who acknowledged the company’s overexpansion during the pandemic and the resulting need to adjust in response to lower-than-expected revenue.
The layoffs will affect all areas of the company, with some departments, such as recruitment, being hit hardest due to a significantly reduced hiring plan for 2023. Meta is also implementing a hiring freeze and reducing discretionary spending.
The cuts come after a period of rapid expansion driven by a boom in e-commerce during the pandemic, which saw tech companies thrive. Zuckerberg explained that the company’s decision to ramp up investments based on this growth was a gamble that did not pay off, with e-commerce trends returning to pre-pandemic levels and an economic downturn affecting revenue.
In response to the challenges, Meta will focus on its core growth areas, including its advertising platforms and long-term investment in the metaverse, despite facing mounting costs in its metaverse division, Reality Labs. This division has already lost billions of dollars, with more losses expected in 2023.
Employees affected by the layoffs will receive generous severance packages, including 16 weeks of pay and healthcare coverage for six months. Meta is also offering support to help them find new jobs, including access to exclusive job listings and assistance for employees on work visas.
Despite the economic challenges, Zuckerberg’s control over Meta remains absolute, due to the company’s dual-class stock structure, which allows him to maintain decision-making power.
