FILE - New Meta sign is seen as Facebook changes its company name to Meta at One Hacker Way in Menlo Park, California, United States on Oct. 28, 2021. (Photo by Tayfun Coskun/Anadolu Agency via Getty Images)
Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.
The move comes just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk.
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
An economic slowdown and a grim outlook for online advertising — by far Meta’s biggest revenue source — have contributed to Meta's woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
In this photo illustration, the Facebook logo is displayed on the screen of an iPhone in front of a Meta logo on Feb. 3, 2022 in Paris, France. (Photo illustration by Chesnot/Getty Images)
Some pain is company-specific, while some is tied to broader economic and technological forces.
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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. CEO Mark Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
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What is the metaverse?
Facebook CEO Mark Zuckerberg and many others believe the future of the internet is something known as "the metaverse."
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.