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This follows reports earlier this week that such job cuts were on the way. However, those reports claimed only a few thousand jobs would be cut. The number is larger than that with 11,000 employees losing their jobs.
That represents roughly 13% of workers employed at Meta Platforms. To go along with that news, Zuckerberg confirmed that Meta will keep its hiring freeze in effect through the first quarter of 2023.
What’s Behind the Meta Layoffs?
Zuckerberg directly addresses the need for layoffs in a message to employees. He notes that hiring increased due to the Covid-19 pandemic. This saw an increase in e-commerce usage, which was behind the demand for more workers.
What Zuckerberg didn’t expect is an eventual drop in demand. Instead, he believed that the demand would continue even after lockdowns were complete. That didn’t turn out to be the case and now Meta has an overabundance of employees.
Here’s a portion of what Zuckerberg had to say about the matter in a note to Meta workers.
“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 is offering 16 weeks of severance pay to employees affected by the layoffs. Employees will get an extra two weeks of pay for each year with the company. Meta will also cover all paid time off, as well as cover healthcare costs for former employees and their families for six months.
META stock is up 7.6% as of Wednesday morning.
There’s more recent stock market news worth diving into below!
We’ve got all of that news ready to go in one place for traders! That includes what’s happening with shares of Redfin (NASDAQ:RDFN), Lucid Group (NASDAQ:LCID), and Mullen Automotive (NASDAQ:MULN) stock today. You can catch up on all of that at the following links!
More Wednesday Stock Market News
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- Mullen (MULN) Stock Revs Higher on Newgate Motor Deal
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.