The company founder admits to overextending investments.
QUICK FACTS:
- Facebook parent firm Meta will lay off 13% of its workforce, more than 11,000 workers, due to a revenue crunch.
- The company founder and CEO Mark Zuckerberg announced the cuts in a Nov. 9 blog post, in which he shouldered the blame for bad estimates about company growth and overextending with investments.
- “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” Zuckerberg wrote. “I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”
- In addition to the pandemic-era e-commerce boom slowing down, the Facebook creator said that a downturn in the economy and increasing competition have all “led our revenue to be significantly lower than I’d projected.”
- In addition to cutting thousands of jobs, Meta is also scaling back its discretionary spending and extending its hiring freeze through the first quarter of 2023
OTHER FINANCIAL CHANGES AT META:
- Meta was also recently fined $24.7 million for campaign finance disclosure violations including repeatedly and intentionally breaking election law.
- The social media company’s fine, which was issued by King County Superior Court Judge Douglass North, is believed to be the largest campaign finance penalty in U.S. history and was the maximum allowed for the more than 800 violations of Washington’s Fair Campaign Practices Act.
BACKGROUND:
- Facebook stock is down about 70% ($800 billion) compared to its original value at the beginning of 2022.
- As American Faith previously reported, many of the company’s issues are related to the “metaverse,” as investors are displeased with its direction and Facebook’s preoccupation with the failing project.
