AUCKLAND: Meta Platforms, the owner of Facebook, told employees on Friday that it would stop developing smartwatches and displays and that almost half of the 11,000 jobs cut this week in unprecedented cost cuts were in tech positions.
Speaking at an employee meeting reported by Reuters, Meta executives also said they were reorganizing parts of the company, merging the voice and video division with other messaging teams and creating a new Family Foundations division focused on solving complex engineering problems.
Executives said the first mass layoff in the social network’s 18-year history affected employees at all levels and across all teams, including people with high performance ratings.
Overall, 54% of those laid off were in business positions, with the remainder in technology positions, said Meta Human Resources head Laurie Goler. According to him, the Meta’s recruiting team has almost halved.
Executives said no further job cuts were expected. But other costs will have to be cut, they said, pointing to ongoing reviews of contractors, real estate, IT infrastructure and various products.
Cutting smart devices
CTO Andrew Bosworth, who runs the metaverse-focused division of Reality Labs, told staff that Meta will complete its work on Portal smart displays and its smartwatches.
Earlier this year, Meta decided to stop selling Portal devices, known for their video calling capabilities, to consumers and instead focus on commercial sales, Bosworth said.
As the economy slumped, executives only recently decided to make “bigger changes,” he said.
“It just took so much time and investment to get into the corporate segment that it seemed like the wrong way to spend time and money,” Bosworth said.
The portal was not a source of significant income and raised privacy concerns for potential users. Meta has yet to introduce any smartwatches.
Bosworth said the smartwatch division will instead focus on augmented reality glasses. He added that more than half of all investment in Reality Labs was in augmented reality.
CEO Mark Zuckerberg on Friday reiterated his Wednesday apologies for having to cut 13% of the workforce, telling employees he didn’t predict Meta’s first revenue drop.
Meta has been actively recruiting during the pandemic amid a surge in social media usage by consumers stuck at home. But business has suffered this year as advertisers and consumers stopped spending in the face of skyrocketing costs and soaring interest rates.
The company also faced increased competition from TikTok and lost access to valuable user data that powered its ad targeting systems after Apple made privacy-focused changes to its operating system.
“Income trends are much lower than I predicted. Again, I was wrong. It was a huge mistake in the planning of the company. I take responsibility,” Zuckerberg said.
Going forward, he added, he has no plans to “significantly” increase Reality Labs’ workforce.