Meta, the Menlo Park-based parent company of social media sites such as Facebook, Instagram, and WhatsApp, laid off 13% of their employees, or over 11,000, on Thursday, continuing the stark trend of cutbacks at Bay Area and Silicon Valley tech companies in the past several weeks.
Large tech layoffs first began in late October, with San Francisco-based Twitter getting rid of 3,700 positions only a week after being bought by Tesla CEO Elon Musk. Many companies quickly followed suit, including rideshare company Lyft removing 550 jobs, Opendoor getting rid of 550 employees, and finance tech giant Stripe laying off 1,120 employees. On Monday, Salesforce, San Francisco’s largest employer, announced mass layoffs for the second month in a row, culling over an additional 200 jobs.
During all of this, Meta remained absent from announcing any layoffs, albeit with many in the industry saying layoffs were coming, and with Meta itself starting to give similar warnings last week. That finally broke on Thursday. In a statement, Meta CEO Mark Zuckerberg announced that over 11,000 employees, or 13% of its staff, will be let go. While this encompasses workers worldwide, the lion’s share of fired employees will come out of the Bay Area, much like the other mass tech firings in the previous weeks.
“I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go,” said Zuckerberg on Thursday. “We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.”
While the other tech companies have blamed the economy, a looming recession, as well as more specialized factors such as rising insurance costs, Meta blamed their firings on increased competition eating into ad revenue and predicting wrongly about the growth of e-commerce and how much revenue it would generate post-pandemic.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” added Zuckerberg. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. 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. ”
Latest mass firing in Silicon Valley
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