Canadian staff among 11,000 laid off worldwide by Facebook owner Meta

Canadian staff among 11,000 laid off worldwide by Facebook owner Meta

Facebook owner Meta Platforms Inc. META-Q +7.16%increase began laying off 11,000 people worldwide Wednesday, including in Canada, becoming the latest tech giant to dramatically slash costs after years of rapid growth in the sector.

Meta has found itself in a triple bind this year. It is grappling with a sector-wide slowdown, a rocky rebranding to focus on immersive “metaverse” experiences, and a sharp slowdown in digital advertising, which underpins much of its traditional business. Its profit last quarter fell by more than half year-over-year, to US$4.4-billion, as the average price per ad on its platforms fell 18 per cent.

Chief executive officer Mark Zuckerberg said in a post that the layoffs amounted to 13 per cent of Meta’s staff, calling the cuts “a last resort” as the company cut discretionary spending and extended a hiring freeze into its next fiscal year. Like many tech executives in recent months, including Shopify Inc. CEO Tobias Lutke, Mr. Zuckerberg acknowledged that he was wrong in planning for a future in which the frenzied pandemic rush into e-commerce would be sustained.

“I got this wrong,” Mr. Zuckerberg wrote, later adding: “We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.”

The news comes just months after Meta and other massive U.S. technology companies were bidding up the price of Canadian tech talent, sending salaries up as much as 30 per cent year-over-year in tech companies of all sizes across the country. In late March 2022, Meta said it would hire an additional 2,500 staff in Canada over five years – many of them remote positions, though the company also announced a new engineering hub in Toronto.

Ontario Premier Doug Ford praised the March job announcement, calling it an opportunity to “demonstrate that our tech talent no longer has to look elsewhere to pursue their careers.”

Meta owns the original Facebook platform, Instagram and WhatsApp, and last year began an extensive, controversial rebrand to focus on 3-D immersive experiences to bring people together in what it calls the “metaverse.” A LinkedIn analysis suggests Meta has at least 1,100 staff in Canada.

Meta’s Canadian office declined to say how many Canadians would be affected by Wednesday’s cuts, but numerous Canadian staff began announcing their own layoffs by mid-morning.

Mitchell Steiman, who was hired at Meta in July as a client partner for emerging brands on Facebook and Instagram, said he was impacted by the layoffs. “It was everything that I could have hoped for in a role, and more. I will miss the people and culture there immensely,” he wrote on LinkedIn Wednesday about his former position at Meta, which was based in the Greater Toronto Area.

“In my small team, 9 out 10 teammates were laid off,” said Lois Wang, a technical recruiter at Meta based in Toronto, writing on LinkedIn that she had been there for just under a year before what she called the “massive” layoffs that particularly affected the company’s recruiting teams.

“In Q3 2022, my performance metrics of onsite interview ranked top 2 among whole 37 teammates in Meta East Coast sourcing team,” she said. “I believe that being optimistic and hopeful is the best way to get through a tough time like this.”

Across Canada, high-profile companies including e-commerce platform Shopify Inc. SHOP-T -5.15%decrease, investment firm Wealthsimple Technologies Inc. and social-media management company Hootsuite Inc. have all shed hundreds of staff in recent months. Last week, Twitter Inc.’s new owner Elon Musk began a 50-per-cent cut of the social network’s staff, which included numerous Canadians, as he began drastically retooling the notoriously unprofitable company.

The sector had experienced unbridled growth since the Great Recession ushered in more than a dozen years of low interest rates, fostering a digital economy that hinged on social platforms and mobile computing. But macro factors such as the COVID-19 pandemic, war in Ukraine and their twinned supply-chain constraints have altered global dynamics.

It’s been nearly a year since public markets began turning against the sector as inflation worries turned into fears of rising interest rates and cut into tech valuations. Those fears were confirmed by this past March, as central bankers began jacking up rates. Tech companies big and small began slashing costs – and jobs – as a result.

More to come