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Meta announces layoff of 11,000 employees from Facebook, Instagram and WhatsApp

Meta Platforms Chief Executive Mark Zuckerberg announced that the company will cut more than 11,000 jobs in the first mass layoffs in the tech giant’s history. The layoffs correspond to 13% of the group’s workforce and affect Facebook, Instagram and WhatsApp employees. With this, the company will have the biggest cost reduction since its creation in 2004. Previously we mentioned the problems Meta has been having but we weren’t sure just how many employees would be let go.

The announcement was made on Wednesday. In it, Zuckerberg also reported that a hiring freeze was extended until the first quarter of 2023.

“I want to take responsibility for these decisions and how we got here,” said the executive. “I know this is difficult for everyone and I am especially sorry for those affected.”

The layoffs at Meta come after Twitter cut nearly 3,700 positions last week after billionaire Elon Musk finalized his $44 billion acquisition of the social media platform.

Meta, whose shares are down 71% this year, is taking steps to cut costs after several quarters of disappointing earnings and falling revenue. On Wednesday morning, the company’s shares rose more than 4% in the New York pre-market.

With the layoffs, Meta will experience the most drastic cost reduction in its history, reflecting a sharp downturn in the digital advertising market, the risk of a US recession and Zuckerberg’s multibillion investment in the Metaverse.

By the end of September, Zuckerberg had already warned employees that Meta intended to cut expenses and restructure teams to adapt to a changing market.

The Menlo Park, Calif.-based company, which is also the parent company of Instagram and WhatsApp, froze hiring at the time.

– In the company’s first 18 years, we basically grew rapidly each year, and more recently, our revenue was flat or slightly low for the first time. So we have to adjust,” Zuckerberg said in a question-and-answer session with employees that month.

Zuckerberg has been urging investors for patience as he invests billions in his vision for the next big computing platform after cell phones: the Metaverse, a collection of digital worlds accessed through virtual and augmented reality devices. The effort requires intensive investment in hardware and research that may not pay off for many years to come.

Meanwhile, the growth of the main social network Facebook is stagnating. The company is working to speed it up and continue to add users to the photo-sharing app Instagram, experimenting with a more interest-based algorithm and short videos called Reels.

The strategy is drawing more attention to Reels, where Meta’s advertising business is less established, costing potential revenue until ads start to succeed. Now Zuckerberg has to make his major corporate transitions with a smaller team.

Meta’s layoffs follow cuts at many other big tech companies. Business software maker Salesforce said on Tuesday it has cut hundreds of employees from its sales teams, while Apple, Amazon and Alphabet have slowed or stopped their hiring.

Snap Inc., parent of rival app Snapchat, is also slowing down, saying in August it would eliminate 20% of its workforce.

Twitter Inc. last week it eliminated about 50% of its workforce after its sale to billionaire Elon Musk. These layoffs were chaotic, with many employees finding they lost their jobs when they were suddenly cut from Slack or email. Musk said the measures are necessary to stem the losses on the social network. He later asked some laid-off workers to come back.

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