Facebook and Instagram owner Meta has announced it will make 11,000 staff – or 13% of its workforce – redundant.
Founder and CEO Mark Zuckerberg informed staff via an internal email explaining the rationale for the restructure, saying he wanted to “take accountability for these decisions and for how we got here”.
The news about Meta comes just a week after Twitter owner Elon Musk revealed plans to cut around half of the social media platform’s 7,000-strong workforce.
It has been reported that those affected by the cuts in the US would get at least six weeks’ salary as compensation, with a further two weeks’ wages for every year they have worked there.
It is yet to be revealed how many UK-based jobs will be affected. The company employs around 87,000 employees across Facebook, Instagram and WhatsApp. It said the redundancy compensation arrangements would be similar across other territories.
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Zuckerberg said the company had been too optimistic in its plans for growth, admitting he had been wrong about customers’ demand for online sales after the pandemic.
Investors have also been concerned about Meta’s heavy investment in virtual and augmented reality, or the collection of technologies known as the metaverse, and Zuckerberg hinted that there could be headcount reductions in its Reality Labs division as well as its apps divisions.
He said: “Recruiting will be disproportionately affected since we’re planning to hire fewer people next year. We’re also restructuring our business teams more substantially.”
Meta’s revenue has fallen for two consecutive quarters. In the quarter to 30 September, it decreased to $27.7 billion, a 4% fall from the same quarter in 2021.
Florence Brocklesby, founder of Bellevue Law, said all eyes would be on Meta as to how it handled the lay-offs.
“Twitter’s handling of its current restructuring has shone a light on how redundancies in the tech sector should – and should not – be handled,” she said.
“Just a few days ago Twitter announced plans to let go of 50% of its staff, with swathes of employees finding themselves suddenly locked out of company systems. Meta needs to avoid making those same mistakes today.”
Michael McCartney, employment partner at Fladgate, said the company would need to pay close attention to UK legal requirements to avoid the same reputational damage P&O Ferries experienced this spring when it announced large-scale lay-offs.
“UK employment law requires an employer to consult with elected representatives (or Trade Unions if there are any recognised) for a minimum period of 30 days, where it envisages 20 or more redundancies and, for at least 45 days, if that number exceeds 100 redundancies,” he said. “The company is also required to send a notice called an HR1 form to the UK government and if it fails to do this, its directors run the risk of criminal liabilities.
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“Social media firms are bound to be conscious of the negative publicity for any failure to comply with employment laws, even if the financial penalty (which amounts to 13 weeks’ pay per employee) alone is not enough of a disincentive.”
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