This is the first major round of layoffs in the social media giant’s history.
Zuckerberg said that he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic lockdowns ended.
The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been numerous job cuts at other tech companies that hired rapidly during the pandemic.
“There must be a range of emotions", Zuckerberg continues, “I am the founder and CEO and responsible for the health and direction of our company and for deciding how we execute that including decision like this….."
“This was ultimately my call", says Zuckerberg.
“It was one of the hardest calls I had to make in the 18 years of the running of the company. IT is harder because it has big impact on your lives, but also because we are loosing people who have put their heart and soul into this place."
“Each of you is talented, passionate, and each of you have a role into making the platform what this is. " Zuckerberg says.
“Unfortunately, this did not play out the way I expected," Zuckerberg had said in a statement. “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."
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
Of particular concern to investors, Meta poured over $10 billion a year into the “metaverse" as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Spooked investors have sent company shares tumbling more than 71% since the beginning of the year and the stock now trades at levels last seen in 2015.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta's woes as well. This summer, the company posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces.
Shares of Meta Platforms Inc. added $5, or 5.2% to close at $101.47 on Wednesday.
(With inputs from AFP)
