Meta Starts First Restructuring Since Founding Today... Zuckerberg Says "I Feel Responsible"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Meta Platforms, the parent company of the social networking service (SNS) Facebook, is set to undergo a large-scale restructuring on the 9th (local time). Mark Zuckerberg, Meta's Chief Executive Officer (CEO), reportedly expressed a sense of responsibility for the current situation caused by excessive optimism.

According to The Wall Street Journal (WSJ), CEO Zuckerberg announced during a meeting with executives on the 8th that a large-scale restructuring would begin on the morning of the 9th. Sources said that Zuckerberg appeared downcast at the meeting and acknowledged responsibility for the situation, attributing it to the company's mistakes such as overhiring due to overconfidence in growth.

Lori Goler, Meta's Head of Human Resources, reportedly stated at the meeting that employees affected by the restructuring would receive severance pay equivalent to at least four months' salary. WSJ reported that immediately after the meeting, company managers began informing their department staff about the layoffs.

WSJ noted that this large-scale restructuring at Meta is the first since the company's founding in 2004, marking 18 years. On the 6th, WSJ had reported, citing multiple sources, that Meta would conduct a large-scale restructuring within the week.

This year, Meta has faced difficulties due to deteriorating performance, including its first-ever decline in revenue and a stock price drop exceeding 70%, ranking last among S&P 500 companies. In February, Meta recorded its first-ever decrease in monthly active users and a negative revenue growth due to a decline in advertising revenue.

WSJ pointed out that IT companies, which aggressively increased hiring after the COVID-19 pandemic, are now facing the largest restructuring crisis in years. Earlier, Twitter laid off about half of its employees, approximately 3,700 people, shortly after being acquired by Elon Musk, CEO of Tesla. WSJ added that Snap, the parent company of Snapchat, announced in August plans to reduce over 1,000 employees, about 20% of its workforce, citing concerns over low growth through next year.