In one of the worst lay-offs ever in the tech industry, Mark Zuckerberg fired about 13 per cent of the global workforce and extended hiring freeze through Q1 2023…reports Asian Lite News
The worst lay-off in the global tech industry by Meta, that saw 11,000 employees being shown the door, has hit India teams too, albeit marginally, reliable sources said on Wednesday.
In one of the worst lay-offs ever in the tech industry after Twitter – which saw 90 per cent of India team being sacked – Meta Founder and CEO Mark Zuckerberg fired about 13 per cent of the global workforce and extended hiring freeze through Q1 2023.
Sources said that layoffs impacted Meta India team across verticals, although the exact number of affected employees could not be ascertained.
The India unit of Meta did not immediately comment on a query.
Meta is likely to have up to 400 employees in the country, and its business is doing relatively well.
According to business intelligence platform Tofler, net profit of Facebook India Online Services, the registered entity of Meta, jumped to Rs 297 crore in FY22 in comparison to Rs 128 crore in FY21, while its revenues grew 56 per cent to Rs 2,324 crore in FY22 from Rs 1,485 crore in FY21.
Last week, Meta announced that its India head, Ajit Mohan, decided to step down from his role at the company to pursue another opportunity.
Mohan has taken over Indian operations of Snap, which is the parent company of Snapchat, which is growing exponentially in the country especially among the youth.
Meanwhile, Zuckerberg said that as a severance measure, the company will pay 16 weeks of base pay, along with two additional weeks for every year of service, “with no cap”.
“Outside the US, support will be similar, and we’ll follow up soon with separate processes that take into account local employment laws,” he added.
Meta Platforms, the parent company of Facebook, Instagram, and WhatsApp, could be the latest tech giant to issue pink slips to employees, according to a report in The Wall Street Journal. The US-based publication reported that Meta may lay off several thousands of employees and clarity may emerge by November 9.
Meta’s revenue has been declining even as costs have been on the rise. Meta’s total revenue was down 4% year-on-year to $27.7 billion even as total expenses were up 19% to $22.1 billion for the September quarter.
Meta had a headcount of 87,314 employees as of September 30, but its hiring has been on a slow trajectory. “Our pace of hiring slowed in the third quarter, consistent with our previously-stated plans. We added 3,700 net new hires in Q3, down from our Q2 net additions of 5,700 despite Q3 typically being a seasonally stronger hiring period. We expect hiring to slow dramatically going forward and to hold headcount roughly flat next year relative to current levels,” Dave Wehner, CFO, Meta, said during the Q3 earnings.
Wehner also cautioned that the company has increased scrutiny on all areas of operating expenses.
A large chunk of the potential layoffs could be from the sales, marketing, and admin departments as Meta’s marketing & sales and general and administration (G&A) expenses increased 6% and 15% respectively, mainly driven by headcount-related costs.
Meta’s big bet on Reality Labs, its metaverse and virtual reality division, has also been under stress which is eating into the profit margins. The Reality Labs expenses were up 24% to $4.0 billion, primarily due to employee-related costs and technology development expenses. Reality Labs’ operating loss for the third quarter stood at $3.7 billion.
In a statement, Zuckerberg said the company is going to take a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending its hiring freeze through Q1.
“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 per cent and let more than 11,000 of our talented employees go,” said Zuckerberg.
“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,” he added.