exist Reuters IST (Published)
Executives said the first mass layoffs in the social media company’s 18-year history affected employees at every level and on every team, including those with high performance ratings.
Facebook owner Meta Platforms told employees on Friday that it would stop developing smart displays and smartwatches and cut nearly half of the 11,000 jobs this week in an unprecedented cost-cutting move.
Speaking at a staff meeting heard by Reuters, Meta executives also said they were restructuring parts of the company’s business, combining the voice and video calling division with other messaging teams.
Executives said the first mass layoffs in the social media company’s 18-year history affected employees at every level and on every team, including those with high performance ratings.
Overall, 54 percent of laid-off workers are in commercial roles, with the rest in technical roles, said Lori Goler, head of human resources at Meta. Meta’s recruiting team was cut in half, she said.
No further layoffs are expected, executives said. But they said other costs must be cut, noting that scrutiny is underway on contractors, real estate, computing infrastructure and various products.
Smart device cutting
Andrew Bosworth, CTO of the Metaverse-oriented Reality Labs division, told employees that Meta would be wrapping up its work on Portal smart display devices and smartwatches.
Earlier this year, Meta had decided to stop marketing the Portal device, known for its video-calling capabilities, to consumers and instead focus on commercial sales, Bosworth said.
With the economy down, executives decided to make “bigger changes” after the summer, he said.
“It takes a long time to get into the corporate space and it takes a lot of investment, and it feels like you’re investing time and money in the wrong way,” Bosworth said.
Portals are not a major source of revenue and raise privacy concerns for potential users. Meta has yet to release any smartwatches.
Bosworth said the smartwatch division will focus on augmented reality glasses. He added that more than half of Reality Labs’ total investment is in augmented reality.
On Friday, CEO Mark Zuckerberg reiterated his apology for having to cut 13% of his workforce starting Wednesday after failing to predict the first drop in Meta’s revenue.
Meta has aggressively recruited during the pandemic amid a surge in social media use by consumers staying at home. But business has suffered this year as advertisers and consumers stopped spending amid soaring costs and rapidly rising interest rates.
The company also faces increased competition from TikTok after Apple made privacy-oriented changes to its operating system and lost access to the valuable user data that powers its ad targeting system.
“The revenue trend was a lot lower than I predicted. Again, I got it wrong. It was a big mistake in the company’s planning. I’m responsible for that,” Zuckerberg said.
Going forward, he added, he doesn’t plan to “massively” increase the headcount in the Reality Labs division.
Meta shares closed up 1 percent at $113.02.