Facebook owner Meta Platforms told employees on Friday it would stop developing smart displays and smartwatches and about half of the 11,000 jobs it eliminated this week in an unprecedented cost-cutting move were technical roles.
Speaking during an employee townhall meeting heard by Reuters, Meta executives also said they were reorganizing parts of the company, combining a voice and video calling unit with other messaging teams.
The first mass layoffs in the social media company’s 18-year history affected employees at every level and across every team, including those with high performance ratings, executives said.
Overall, 54% of people were placed in business positions and the rest were in technology roles, said Meta human resources chief Lori Goler. Meta’s recruiting team was halved, she said.
Officials said another round of job cuts was not expected. But other expenses will have to be cut, he said, adding that reviews regarding contractors, real estate, computing infrastructure and various products are underway.
smart device cut
chief technology Officer Andrew Bosworth, who runs the Metaverse-oriented Reality Labs division, told employees that Meta Portal will end its work on smart display devices and smartwatches.
Bosworth said Meta decided earlier this year to stop marketing the Portal devices known for their video calling capabilities to consumers and focus on business sales.
As the economy declined, officials decided to make “major changes” after the summer, he said.
Bosworth said, “It was just going to take so long to get into the enterprise segment, and with so much to invest, it just felt like the wrong way to invest your time and money.”
The portal was not a major revenue generator and attracted privacy concerns from potential users. Meta hadn’t unveiled any smartwatches yet.
Bosworth said the smartwatch unit will focus on augmented reality glasses. He said more than half of Reality Labs’ total investment was going into augmented reality.
Chief Executive Officer Mark Zuckerberg on Friday reiterated his apology from Wednesday about cutting the workforce by 13%, telling employees he failed to anticipate Meta’s first drop in revenue.
Meta has been aggressively hired during the pandemic amid an increase in the use of social media by consumers stuck at home. But business suffered this year as advertisers and consumers pulled the plug on spending due to rising costs and rapidly rising interest rates.
The company also faced increased competition from TikTok and lost access to valuable user data operating its ad targeting system after Apple made privacy-oriented changes to its operating system.
“The revenue trend is much lower than I predicted. Again, I got it wrong. It was a big mistake in planning for the company. I take responsibility for that,” Zuckerberg said.
Going forward, he said, he was not planning to grow the Reality Labs unit’s workforce “massively.”
Meta shares closed up 1% at $113.02.
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