Tuesday, July 23, 2024

Meta fires 11,000 employees. Zuckerberg: “We need to be leaner”

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The announcement comes in a letter from the founder to employees: in one year the brand has lost 70% of its value. The precedent of Twitter

“I was wrong, and I take responsibility for it.” With these words Mark Zuckerberg announced Wednesday morning the cut of 13% of the workforce of Meta, or 11 thousand employees. The news had been anticipated by the Wall Street Journal in recent days: this is the first large restructuring of the company founded in 2004, with the name of Facebook, which has seen its shares drop by more than 70% in the last year. 

As Zuckerberg reconstructed in a letter sent to employees and filed with the American Securities and Exchange Commission, the cut was necessary following “a significant increase in investments” which did not lead to the desired results, while “not only the e -commerce has never returned to the levels of the acute phase of the pandemic, but the macroeconomic recession, the increase in competition and the decline in online advertising have meant that our revenues were much lower than I expected ».

Translated: while the entire sector is experiencing one of the most delicate moments of its relatively young history due to a series of conjunctures, Zuckerberg has also pushed the accelerator to face a new world still to be built, that metaverse that in the last quarter cost him $ 3.7 billion and will cause further losses in 2023.

When he talks about competition, the 38-year-old entrepreneur refers to the success of TikTok – in turn conditioned by the trend of advertising: the objectives for 2022 have been reduced by at least 2 billion – and to the changes to Apple’s operating system, which limit the collection of user data. 

Meta employees involved in the dismissal “are no longer able to access most of Meta’s systems immediately”. They will be notified with “an e-mail (which will remain active for today, ed) and then they will be able to talk to someone to get answers to their questions” reads the letter. 

Those residing in the United States will receive four months’ salary, plus two weeks for each year of service, and six months of health insurance. For the rest of the world, including Europe, no details have yet been given. Just as it is not yet clear which figures are most involved. 

We must “become a leaner and more efficient company,” wrote Zuck. Trying to explain how he intends to do it: the cost reduction will also be entrusted to a «reduction of our real estate perimeter, we are moving towards sharing a desk for people who spend most of their time out of the office. In the coming months we will implement further cost reductions like this one ».

Then: “an in-depth review of our infrastructure spending is planned. As we build our artificial intelligence infrastructure, we focus on becoming even more efficient ». New hires will also be blocked until the first quarter of 2023.

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