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Meta lays off 11,000 workers as it faces competition from TikTok



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Facebook parent company Meta plans to cut more than 11,000 jobs, or 13 percent of its workforce, as it seeks to scale back expenses and transform its business in a more competitive digital advertising market.

The social media giant also will cut discretionary spending and extend its hiring freeze through March in a bid to become “leaner and more efficient,” Meta chief executive Mark Zuckerberg said in a Wednesday statement.

He called the layoffs “some of the most difficult changes we’ve made in Meta’s history” and noted that all employees would soon get an email “letting you know what this layoff means for you.”

Zuckerberg said the company would refocus on priorities such as its advertising business and elevating content from viral creators over friends and family, a strategy that has made the short-form video app TikTok so popular.

He said the job cuts affected the entire organization, though teams focused on recruiting workers were disproportionately downsized.

“We’re restructuring teams to increase our efficiency,” Zuckerberg said. “But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”

The layoffs mark a tumultuous new period in Silicon Valley, with tech giants long known as recession-proof bastions of economic power shedding huge numbers of workers in recent weeks. For years, the companies have grown rapidly and hired at ravenous speeds. Facebook alone expanded its staff by 28 percent, to 87,314, in the 12 months ending in September, regulatory filings show.

One of the biggest downsizings happened at Twitter last week, where new owner Elon Musk cut roughly half of the 7,500-member workforce, though over the weekend some workers were asked to come back.

On Tuesday, media reports surfaced that hundreds of layoffs were underway at Salesforce, which sells business software programs. The ride-hailing app Lyft, financial services platform Stripe and digital real estate marketplace Zillow have also cut staffers, according to company statements and media reports.

Meta is expected to join tech industry’s growing list of layoffs

Zuckerberg said every worker that was laid off would receive 16 weeks of base pay and two additional weeks for every year worked. The company will also cover their health-care costs for six months.

He said that the company had cut off access to most Meta systems for displaced workers but that their email would remain “active throughout the day so everyone can say farewell.”

The layoffs at Meta — which changed its name from Facebook a little over a year ago — come as the company is taking a big gamble on building the metaverse. Part of the hiring boom of recent years has focused on building immersive digital realms accessed through virtual reality, which Zuckerberg says will be the next great computing platform after mobile phones and replace some in-person communication.

The company is heavily investing in virtual reality headsets and other technology to try to corner the market. Meta has said it expects operating losses for Reality Labs, the division working on its hardware offerings, to grow even bigger in 2023.

Last month, the company unveiled a $1,500 VR headset that it says will transform the ability of workers to collaborate with colleagues and conduct their jobs.

That vision has been slow to materialize, in part because the company is still developing the underlying technology and a wider range of applications that would make it appealing to mainstream audiences. While the company dominates the VR headset market, Meta is likely to face significant competition from Apple.

Meta operates the social media platforms Facebook and Instagram and the messaging app WhatsApp, among other initiatives. The more traditional business model for its main Facebook app, which relies on advertising, has been hit particularly hard by larger economic challenges. Some digital advertisers have pulled back on spending as inflation and Russia’s invasion of Ukraine have created market instability.

At the start of the coronavirus pandemic, more retailers and shoppers flocked to e-commerce, which increased Meta’s revenue — a shift that Zuckerberg expected to become permanent even after vaccines became accessible and social restrictions eased. That didn’t turn out to be true, 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,” he said. “I got this wrong, and I take responsibility for that.”

Meta is increasingly fending off competition for marketing dollars and users from upstart rivals such as TikTok, the short-form video platform that has taken off among younger generations. This year, the company reported that Facebook lost daily users for the first time in its 18-year history, though user growth later recovered. Last month, Meta reported that revenue fell in the third quarter.

And Meta has estimated that it will have lost $10 billion this year after Apple introduced privacy restrictions that forced appmakers such as Facebook to explicitly ask users whether they could collect data about their online activity, hurting the social media company’s ability to facilitate targeted advertising campaigns. Facebook argued at the time that the new privacy rules would hurt small businesses that need granular information about users to find customers.

In the face of those challenges, Meta executives have been warning employees that the company was entering a new era of higher performance expectations and more focus on its biggest goals.

On Wednesday, Zuckerberg addressed the laid-off employees in a roughly 10-minute Zoom call in which he largely reiterated how sorry he was to make the “difficult” decision of issuing layoffs and ticked off the market pressures the business faces, according to a recording of the call The Washington Post listened to.

“It was one of the hardest calls I’ve had to make in the 18 years of running the company,” he said. “No matter what team you may have worked on, each of you played a role in contributing to the products that billions of people use to connect every day.”

Zuckerberg also said the company sought to rein in other costs before resorting to layoffs.

“This is going to add up to a meaningful cultural shift in terms of how we operate,” he said.

Shortly afterward, he held a separate call in which he addressed Meta’s remaining staffers, a recording of which The Post also listened to.

In addition to many of the same points, he told them he hadn’t informed managers about the layoffs ahead of time, because he was concerned about leaks. He also said that some teams were affected more than others, including Meta’s recruiting teams, and that its business teams would be restructured.

No one else spoke on either call, chat was disabled, and Zuckerberg did not take questions. He told the remaining employees that there would be a company “town hall” on Friday to answer questions and a further question-and-answer session with company leaders next week.

During a recent call with investors, Zuckerberg touted the company’s decision to mimic the strategy that has made TikTok so popular: showing users entertaining content from strangers over posts from their friends and family. The company is also heavily promoting its short-form video product, Reels, on Instagram and Facebook as well as in business messaging.

During the same call, Facebook said it plans to slow hiring dramatically and hold its head count next year to be roughly the same as it is now.

Facebook workers fear cuts after blunt warnings from Zuckerberg, leaders

More than a month ago, Meta said it would stop making new offers to job candidates, sourcing candidates and approving internal transfers while the company reevaluated how best to prioritize its staffing resources, according to a memo posted to the company’s internal message board and viewed by The Post. Zuckerberg said Wednesday the company would extend its hiring freeze through the first quarter of 2023 “with a small number of exceptions.”

This summer, Lori Goler, the company’s top human resources director, advised managers to implement the “rigorous performance management” practices that Meta relied on before the pandemic, such as giving critical feedback to struggling employees.

In July, Meta’s head of engineering, Maher Saba, instructed engineering managers in an internal memo to identify and weed out their lowest-performing employees.

“If a direct report is coasting or is a low performer, they are not who we need; they are failing this company,” Saba wrote. “As a manager, you cannot allow someone to be net neutral or negative for Meta.”

Such messages from company executives created a wave of anxiety and resentment among Facebook’s workforce. Some employees have worried they could lose their jobs or see their annual bonuses reduced. Others are concerned that an already rigorous corporate environment will grow even more competitive as employees jockey for fewer coveted positions, The Post has reported.

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