Meta Platforms lays off 11,000 jobs globally as revenue takes hit

(Alliance News) - Meta Platforms on Wednesday confirmed it plans to cut more than 11,000 jobs globally as part of a major restructuring of the tech giant, as ad revenue falls.

On Wednesday, Chief Executive Mark Zuckerberg commented: "Today I'm sharing some of the most difficult changes we've made in Meta's history. I've decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.

"We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1," Zuckerberg added.

The California-based parent company of social media platform Facebook explained that it is making this change as its revenue outlook is lower than previously expected.

Meta's outlook for revenue in its fourth quarter is unchanged at between USD30 billion and USD32.5 billion. Its 2022 expense outlook also remains unchanged, between USD85 billion and USD87 billion.

However, the company said it has continued to refine its 2023 expense budget and now expects 2023 total expenses to be in the range of USD94 billion and USD100 billion, lowered from USD96 billion and USD101 billion previously.

In its third quarter which ended September 30, the social media giant reported a revenue fall of 4% to USD27.71 billion from USD29.01 billion a year before. Income from operations declined by 46% to USD5.66 billion versus USD10.42 billion. Net income totalled USD4.40 billion, down 52% compared to USD9.19 billion a year prior.

The company attributed these losses to foreign exchange rates and higher total costs and expenses.

Zuckerberg attributed the decision today to a "macroeconomic downturn," which increased competition, and ads signal losses that contributed to a drop in Meta's revenue.

"The tech sector's taken a real battering on global stock markets this year and the prospect of a global recession is already pushing advertisers to cut back on their digital spend leaving companies like Meta in a vulnerable position. Today the Facebook owner followed through on rumours of some serious cost cutting with the announcement of eleven thousand job cuts," Danni Hewson, financial analyst at AJ Bell, commented.

According to the company's most recent UK filing, Meta employs just over 5,000 people in the UK.

It has not been confirmed how many UK staff would be affected by the cuts, but if it is in line with the global reduction of 13%, it could mean around 650 job losses in the UK.

Meta's European headquarters is in Dublin, with 3,000 employees based in Ireland.

The global announcement will impact full-time Meta employees in Ireland. It will not affect contract workers employed by third parties in the country, which is around 6,000 people.

"Meta's not exactly sold investors on its new strategy which seeks to dominate the 'metaverse', a technological construct that still feels a little too disconnected from real life and real revenues at the moment. After months of talk about the impending recession not looking like a traditional recession because of high employment levels, cracks have really begun to appear in the last few weeks. But perversely news of job cuts has signalled to investors that Meta is serious about reining in spend and focussing on profitability, with shares jumping in early trading," Hewson added.

Shares were up 6.3% at USD102.62 each on Wednesday afternoon in New York.

By Abby Amoakuh; [email protected]

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