Meta Cuts More Than 11,000 Jobs; Backs Q4 Revenue View

(RTTNews) - Facebook parent Meta Platforms decided to lay off more than 11,000 employees, representing about 13 percent of its global workforce, CEO Mark Zuckerberg said. The reductions are across both Family of Apps and Reality Labs segments.

In a message to Meta employees, Zuckerberg said the company intends to become a leaner and more efficient company by cutting discretionary spending and extending hiring freeze through the first quarter.

According to Zuckerberg, the decision mainly reflects the company's revenue outlook, which is lower than expected at the beginning of this year, as well as expectation for efficient operations across Family of Apps and Reality Labs.

Zuckerberg said, "At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth.... 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. I got this wrong, and I take responsibility for that."

In the United States, the affected employees will be paid 16 weeks of base pay plus two additional weeks for every year of service, with no cap.; the company will pay for all remaining PTO time, and everyone impacted will receive their November 15, 2022 vesting.

Further, the company will cover the cost of healthcare for people and their families for six months, and will provide three months of career support with an external vendor, including early access to unpublished job leads.

For those on visa, the company will provide immigration support.

Outside the U.S, employees will get similar support, and the company said it will follow up soon with separate processes that take into account local employment laws.

During the company's third-quarter earnings call on October 26, Zuckerberg had stated that in 2023, the company is going to focus its investments on a small number of high priority growth areas. That means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year.

In a statement filed with the Securities and Exchange Commission, Meta also confirmed its fourth-quarter revenue outlook of $30 billion to $32.5 billion, and 2022 expense outlook of $85 billion to $87 billion. Meanwhile, it now expects 2023 total expenses to be in the range of $94 billion to $100 billion, lowered from previously expected $96 billion to $101 billion.

Meta said it continues to anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year.

In pre-market activity on Nasdaq, Meta shares were gaining around 5 percent to trade at $101.15.