Meta is laying off more than 11,000 employees, including some members of its Reality Labs team.
Meta CEO Mark Zuckerberg confirmed the job cuts in a letter to employees, and said the layoffs will affect 13 percent of the company's entire workforce.
Reductions will be made in every organization across both Family of Apps and Reality Labs, the latter of which houses Meta's game studios and hardware maker Oculus, although it's been noted that some teams will "be affected more than others."
Those U.S. employees affected by the layoffs will receive 16 weeks of severance pay plus two additional weeks for every year of service (with no cap), payments for all remaining PTO, six months of health insurance, three months of career support, and immigration support to help those on visas "make plans and work through their immigration status."
Zuckerberg said the cuts will allow Meta to become a "leaner and more efficient company," and also outlined plans to reduce discretionary spending and extend a hiring freeze in a bid to regroup.
"I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted," wrote Zuckerberg.
The long-serving boss said that Meta has arrived at this point by gambling on the long-term impact of the pandemic, and explained he wrongly believed the surge of e-commerce and rapid need for digitization driven by COVID-19 lockdowns would continue after the pandemic had ended.
As a result of that misplaced belief, he committed to investing in the company but now says the situation didn't play out as expected.
"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," continues the letter.
"I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months. "
Zuckerberg called the situation a "sad moment," but said that Meta's revenue outlook is lower than initially predicted at the beginning of the year, adding that there's a need to ensure the company is "operating efficiently across both Family of Apps and Reality Labs."
As far as Reality Labs is concerned, the division reported a $3.67 billion loss over the three-month period ended September 30, 2022, and pulled in $285 million in revenue.
Looking ahead, Zuckerberg said Meta's core business is "among the most profitable ever built" and claims the company is currently being "deeply underestimated."
"We’re leading in developing the technology to define the future of social connection and the next computing platform," he added. "We do historically important work. I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever."