Meta executive: Tech industry restructuring underway, nearly half of industry layoffs

Facebook owner Meta Platforms told employees on Friday that it would stop developing smart displays and smartwatches, and this week would make an unprecedented cost-cutting move: Nearly half of the 11,000 jobs to be slashed were technical positions.

Speaking at a staff meeting heard by Reuters, Meta executives also said they were restructuring parts of the company, combining voice and video calling with other messaging teams and creating a new unit called A family foundation that focuses on tough engineering problems.

Executives said the first mass layoffs in the social media company's 18-year history affected employees at every level and on every team, including individuals with high performance ratings.

Overall, 54% of laid-off workers are in commercial roles, with the rest in technical roles, said Lori Goler, head of human resources at Meta. Meta's recruiting team has been cut by almost half, she said.

Executives said no further layoffs were expected. But they said other costs must be cut, noting that scrutiny is underway on contractors, real estate, computing infrastructure and various products.

Andrew Bosworth, CTO of the Metaverse-oriented Reality Labs division, told employees that Meta will end its work on Portal smart display devices and smartwatches.

Earlier this year, Meta had decided to stop marketing its Portal device, known for its video-calling capabilities, to consumers and instead focus on commercial sales, Bosworth said.

Executives have recently decided to make "bigger changes" as the economy slumps, he said.

Portals are not a major source of revenue and raise privacy concerns for potential users. Meta has yet to release any smartwatches.

The smartwatch division will focus on augmented reality glasses, Bosworth said. He added that more than half of Reality Labs' total investment is in augmented reality.

On Friday, CEO Mark Zuckerberg reiterated his apology for having to cut 13% of his workforce starting Wednesday, telling employees he failed to predict the first drop in Meta's revenue.

During the pandemic, Meta has been aggressively hiring amid a surge in social media use by consumers staying at home. But business has suffered this year as advertisers and consumers stopped spending amid soaring costs and rapidly rising interest rates.

The company also faces increased competition from TikTok after Apple made privacy-oriented changes to its operating system and lost access to the valuable user data that powers its ad targeting system.

"The revenue trend is a lot lower than I predicted. It was a big mistake in the company's planning. I'm responsible for that," Zuckerberg said.

Going forward, he added, he doesn't plan to "massively" increase the headcount in the Reality Labs division.