Meta Platforms, the parent company of Facebook, informed its employees on Friday that it would cease the development of smart displays and smartwatches. In an unprecedented cost-cutting move that eliminated nearly half of the 11,000 jobs, predominantly in technology roles, Meta executives disclosed these decisions during an employee townhall meeting heard by Reuters.
As part of the company’s reorganization efforts, executives announced the consolidation of a voice and video calling unit with other messaging teams. Additionally, a new division called Family Foundations was introduced, focusing on addressing challenging engineering problems.
The mass layoffs, the first in the social media giant’s 18-year history, impacted employees across all levels and teams, including those with high performance ratings. Meta’s human resources chief, Lori Goler, revealed that 54 percent of the laid-off employees were in business positions, while the remainder held technology roles. The recruiting team at Meta was reduced by nearly half.
Although executives stated that further rounds of job cuts were not anticipated, they acknowledged the need to trim other expenses. Reviews are underway concerning contractors, real estate, computing infrastructure, and various products.
Meta’s Chief Technology Officer, Andrew Bosworth, shared that the company would discontinue the development of Portal smart display devices and smartwatches. The decision to shift focus from consumer sales to business sales for Portal devices was made earlier this year, but recent economic conditions prompted more significant changes. Bosworth explained that the investment required to enter the enterprise segment was substantial and felt impractical.
Regarding smartwatches, Bosworth mentioned that the unit would redirect its efforts toward augmented reality glasses, with more than half of the total investment in the Reality Labs division allocated to augmented reality.
CEO Mark Zuckerberg reiterated his apology for the workforce reduction, acknowledging a failure in forecasting Meta’s first drop in revenue. The company had aggressively hired during the pandemic, but this year saw a decline in business due to increased costs, rising interest rates, competition from TikTok, and changes in Apple’s operating system affecting ad targeting systems.
Looking ahead, Zuckerberg stated that he did not plan to significantly expand the headcount of the Reality Labs unit.
