Meta Platforms began mass job cuts Wednesday, becoming the latest tech company to slash its headcount and restrict spending in other areas.
CEO Mark Zuckerberg said in a letter to employees that Meta (ticker: META) would cut around about 13% of its workforce, or more than 11,000 employees.
“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,” Zuckerberg said.
He said Meta would extend its hiring freeze, cut its real-estate portfolio and review infrastructure spending.
“Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently across both Family of Apps and Reality Labs,” Zuckerberg wrote.
Meta shares were rising 3.7% in premarket trading on Wednesday.
The tech sector has suffered a raft of job cuts in recent weeks. Tesla (TSLA) CEO Elon Musk wasted little time in slashing Twitter’s workforce, reportedly sacking around half the company’s 7,500 employees last week shortly after buying the social media platform.
Payments start-up Stripe announced plans to cut 14% of its staff Thursday, while ride-sharing app Lyft (LYFT) said it is axing 13% of its employees. Amazon.com (AMZN) declared a halt to corporate hiring earlier this month, citing the “unusual macroeconomic environment.”
Meta had around 87,000 staff, as at Sept 30, a 28% increase year-over-year, the company revealed in its third-quarter earnings report last month. At the time, Meta said headcount at the end of 2023 would be roughly in line with current levels.
Prominent Meta investor Altimeter Capital has called for the company to slash staff by at least 20% by Jan.1 2023 and reduce annual capital spending by at least $5 billion a year. It also wants Meta to limit investment in the metaverse to no more than $5 billion a year, around half the current level.