Meta Platforms said on Wednesday it will let go 13% of its workforce, or more than 11,000 employees, in one of the biggest tech layoffs this year as the Facebook parent battles soaring costs and a weak advertising market.
Chief Executive Officer Mark Zuckerberg called the job cuts "the most difficult changes we've made in Meta's history."
"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," Zuckerberg said in a message to employees.
The broad job cuts, the first in Meta's 18-year history, follow thousands of layoffs at other major tech companies including Elon Musk-owned Twitter and Microsoft Corp.
The pandemic boom that boosted tech companies and their valuations has turned into a bust this year in the face of decades-high inflation and rapidly rising interest rates.
"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," Zuckerberg said.
"I got this wrong, and I take responsibility for that."
Zuckerberg stressed the need to become more capital efficient and said the company would shift resources to "high priority growth areas" such as its AI discovery engine, ads and business platforms, as well as its metaverse project.
Meta said it would pay 16 weeks of base pay plus two additional weeks for every year of service as a part of the severance package and all remaining paid time off.
Employees will get the cost of health care for six months and those impacted will receive their Nov. 15 vesting, according to the company.
Meta said it also plans to cut discretionary spending and extend its hiring freeze through the first quarter.
The company's shares, which have lost more than two-thirds of their value, were up about 3% in pre-market trading.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs "when the company is losing over $4M/day," though did not provide details about the losses.
Meta has worried investors by pouring over $10 billion a year into the "metaverse" as it shifts its focus away from social media. Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are bracing for a potential recession. There's also the challenge of Apple's privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also a growing threat as younger people flock to the video-sharing app over Instagram, which Meta also owns.