Meta latest tech firm with mass layoffs

SAN FRANCISCO, 10 Nov 2022:

Meta – the parent company of Facebook, Instagram, WhatsApp and Messenger – yesterday announced it will lay off 11,000 workers, 13% of its workforce, joining a long list of tech companies in the US also laying off staff, including Twitter, Lyft, Robinhood and Coinbase.

Other tech firms, such as Amazon, are freezing their hiring.

While tech companies prospered during the coronavirus pandemic, emerging out of the worst of the health crisis has not gone so well: in the latest round of financial results, several companies in this sector announced a drop in their yields.

“At the start of Covid-19, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Meta CEO Mark Zuckerberg said in a statement yesterday.

Meta, like other tech giants, went on a hiring spree during the pandemic, adding more than 27,000 employees to its workforce between 2020 and 2021, and another 15,344 in the first nine months of this year.

“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected,” added the Facebook founder.

Zuckerberg said not only has online commerce returned to previous trends, but the company has also been hit by “the macroeconomic downturn,” increased competition and loss of ad revenue.

Last week, Elon Musk, the world’s richest man and the new owner of Twitter, laid off half of a workforce of some 7,500 people worldwide.

“Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day,” Musk wrote in a tweet.

Ride-sharing company Lyft also announced it will cut 13% of its employees, and Stripe, a payment processing platform, said it would cut 14%, roughly 1,100 jobs.

Online shopping giant Amazon – where around 1.5 million people work, making it one of the largest employers in the US – said last week it had decided to pause corporate hiring because the economy was “in an uncertain place.”

“We anticipate keeping this pause in place for the next few months, and will continue to monitor what we’re seeing in the economy and the business to adjust as we think makes sense,” Amazon’s senior vice president of people experience and technology Beth Galetti said in a statement.

In addition to the layoffs, companies have also announced the conditions under which employees will be let go.

In the case of Meta, Zuckerberg said US employees affected by the layoffs (it is still unknown how they will affect a global workforce of 87,000 people) will receive four months of severance pay, plus two additional weeks per year worked.

In addition, the company will cover the cost of healthcare for six months, and said that outside the US the support would be similar, although the laws in each country will determine the scope of these compensation.

With Twitter, the dismissed workers were to receive a three-month payment, and a group of them filed a class-action lawsuit against the company for not having received the 60-day notice period provided for by the employment laws of San Francisco, where the company is headquartered.