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Meta Laying Off More Than 11,000 Employees: Read Zuckerberg’s Letter Announcing the Cuts

Rebekah Fuller

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META

Mark Zuckerberg told the world last October that he was rebranding Facebook to Meta as the company pushes toward the metaverse.
Facebook | via Reuters

Metasaid in a letter to employees Wednesday.

“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Zuckerberg said in the letter. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.”

Shares of Meta were up about 7.7% Wednesday morning.

The layoffs come amid a tough time for Facebook parent company Meta, which provided lukewarm guidance in late October for its upcoming fourth-quarter earnings that spooked investors and caused its shares to sink nearly 20%.

Investors have been concerned about Meta’s rising costs and expenses, which jumped 19% year over year in the third quarter to $22.1 billion. The company’s overall sales declined 4% to $27.71 billion in the quarter while its operating income dropped 46% from the previous year to $5.66 billion.

“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.” Zuckerberg said.

He said Meta is making reductions in every organization but that recruiting will be disproportionately affected since the company plans to hire fewer people in 2023. The company extended its hiring freeze through the first quarter with a few exceptions, Zuckerberg said.

“This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place,” he added.

Impacted employees will receive 16 weeks of pay plus two additional weeks for every year of service, Zuckerberg said. Meta will cover health insurance for six months.

Meta is heavily investing in the metaverse, which generally refers to a yet-to-be developed digital world that can be accessed by virtual reality and augmented reality headsets. This hefty bet has cost Meta $9.4 billion so far in 2022, and the company anticipates that losses “will grow significantly year-over-year.”

Zuckerberg said during a call with analysts as part of its third-quarter earnings report that Meta plans to “focus our investments on a small number of high priority growth areas” during the next year.

“That means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year,” Zuckerberg said. “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”

Meta counts more than 87,000 employees as of the end of September.

Here’s Mark Zuckerberg’s letter to employees:

“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.

I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.

How did we get here?

At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.

In this new environment, we need to become more capital efficient. We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse. We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. 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.

How will this work?

There is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this.

Everyone will get an email soon letting you know what this layoff means for you. After that, every affected employee will have the opportunity to speak with someone to get their questions answered and join information sessions.

Some of the details in the US include:

Severance. We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap.PTO. We’ll pay for all remaining PTO time.RSU vesting. Everyone impacted will receive their November 15, 2022 vesting.Health insurance. We’ll cover the cost of healthcare for people and their families for six months.Career services. We’ll provide three months of career support with an external vendor, including early access to unpublished job leads.Immigration support. I know this is especially difficult if you’re here on a visa. There’s a notice period before termination and some visa grace periods, which means everyone will have time to make plans and work through their immigration status. We have dedicated immigration specialists to help guide you based on what you and your family need.

Outside the US, support will be similar, and we’ll follow up soon with separate processes that take into account local employment laws.

We made the decision to remove access to most Meta systems for people leaving today given the amount of access to sensitive information. But we’re keeping email addresses active throughout the day so everyone can say farewell.

While we’re making reductions in every organization across both Family of Apps and Reality Labs, some teams will be affected more than others. Recruiting will be disproportionately affected since we’re planning to hire fewer people next year. We’re also restructuring our business teams more substantially. This is not a reflection of the great work these groups have done, but what we need going forward. The leaders of each group will schedule time to discuss what this means for your team over the next couple of days.

The teammates who will be leaving us are talented and passionate, and have made an important impact on our company and community. Each of you have helped make Meta a success, and I’m grateful for it. I’m sure you’ll go on to do great work at other places.

What other changes are we making?

I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months.

We’re also extending our hiring freeze through Q1 with a small number of exceptions. I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point. This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently.

I’m currently in the middle of a thorough review of our infrastructure spending. As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.

Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently across both Family of Apps and Reality Labs.

How do we move forward?

This is a sad moment, and there’s no way around that. To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions.

To those who are staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to make sure our future is strong.

I believe we are deeply underestimated as a company today. Billions of people use our services to connect, and our communities keep growing. Our core business is among the most profitable ever built with huge potential ahead. And we’re leading in developing the technology to define the future of social connection and the next computing platform. We do historically important work. I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever.

We’ll share more on how we’ll operate as a streamlined organization to achieve our priorities in the weeks ahead. For now, I’ll say one more time how thankful I am to those of you who are leaving for everything you’ve done to advance our mission.

Mark”

Watch: Meta has to go back to their core advertising business and double down.

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Source Here: cnbc.com

Business

Elon Musk Says He Doesn’t Want to Be CEO of Any Company and Tries to Walk Back SEC Insults

Rebekah Fuller

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TSLA

Tesla Inc CEO Elon Musk attends the World Artificial Intelligence Conference (WAIC) in Shanghai, China August 29, 2019.
Aly Song | Reuters

Elon Musk said in court on Wednesday that he does not want to be the CEO of any company.

He recently acquired and appointed himself as the CEO of social media giant TwitterTesla

Musk also confirmed that the arrangement at Twitter is temporary. “I expect to reduce my time at Twitter and find somebody else to run Twitter over time,” he said.

Musk and Tesla are in the midst of a trial over the 2018 CEO pay package that the company granted him, an unparalleled compensation plan that has made Musk a centi-billionaire and the richest person on the planet.

Shareholder Richard J. Tornetta has sued Musk and Tesla alleging that the CEO compensation was excessive, and that its authorization by the Tesla board amounted to a breach of its fiduciary duty.

Musk also said during the testimony that CEO is not necessarily an apt description for the work he thinks he does at his companies.

He said, “At SpaceX it’s really that I’m responsible for the engineering of the rockets and Tesla for the technology in the car that makes it successful. So, CEO is often viewed as somewhat of a business focused role but in reality, my role is much more that of an engineer developing technology and making sure that we develop breakthrough technologies and that we have a team of incredible engineers who can achieve those goals.”

He also said, “It’s my experience that great engineers will only work for a great engineer. That is my first duty, not that of CEO.”

Attorneys for Tornetta also asked Musk about a CNBC report that he had authorized at least 50 Tesla employees, mostly Autopilot engineers, to help with his work at Twitter, now that he owns the social media company.

Musk said he only called on Tesla employees to assist him at Twitter on a “voluntary basis,” and to work “after-hours” at Twitter. He said that no Tesla board member had called him to say it is not a good idea to use Tesla resources for one of his other, privately-held companies.

The Tesla CEO specified that, “This was an after hours– just if you’re interested in evaluating, helping me evaluate the Twitter… that’d be nice. I think it lasted for a few days and it was over.”

When a lawyer asked if he thought it was a good idea to be using Tesla assets at Twitter, Musk responded, “I didn’t think of this as using Tesla assets…There’s 120,000 people at the company. This is de minimis.”

With all of his business commitments, Musk explained during his testimony that Tesla has taken more time than anything in recent years.

Attorneys for the plaintiffs in the trial asked Musk whether it was a good idea to strike a combative attitude towards regulators, and specifically asked him about prior insults he lobbed at the Securities and Exchange Commission.

“In general, I think the mission of the SEC is good but the question is whether that mission is being executed well,” he replied.

“In some cases I think it is not. The SEC fails to investigate things that they should and places far too much attention on thing that are not relevant. The recent FTX thing I think is an example of that. Why was there no attention given to FTX? Investors lost billions. Yet the SEC continues to hound me despite shareholders being greatly rewarded. This makes no sense.”

In fact, the SEC and several other regulators have reportedly launched an investigations into collapsed crypto firm FTX, but it’s not clear if those investigations started prior to the firm’s sudden bankruptcy last week.

This news is developing, please check back for updates.

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Article: cnbc.com

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Fed’s Daly Sees Rates Rising at Least Another Percentage Point As ‘pausing Is Off the Table’

Rebekah Fuller

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San Francisco Federal Reserve President Mary Daly said Wednesday she expects the central bank to raise interest rates at least another percentage point, and possibly more, before it can pause to evaluate how the inflation fight is going.

Daly told CNBC in a live interview that her most recent estimate in the Fed’s summary of economic projections puts the benchmark overnight lending rate around 5%. She added that the right range is probably from 4.75% to 5.25% from its current targeted range of 3.75%-4%.

“I still think of that as a reasonable landing place for us before we hold, and the holding part is really important,” she told Steve Liesman during the “Squawk on the Street” interview. “It’s a raise-to-hold strategy.”

Thus far, the Fed has hiked the fed funds rate, which spills over into a slew of other consumer debt products, six times, including four consecutive 0.75 percentage point moves.

Looking ahead, market pricing is largely in line with what Daly suggested. Traders see the central bank adding another 0.5 percentage point when it meets again in mid-December, then moving a bit higher before stopping around the 4.75%-5% range.

Daly said she sees a point where the Fed will be able to evaluate the impact of its hikes before moving higher, but that is not now.

“Pausing is off the table right now. It’s not even part of the discussion,” she said. “Right now, the discussion is rightly around slowing the pace and … focusing our attention really on what is the level of interest rates that will end up being sufficiently restrictive.”

The Fed is using its primary tool of interest rate increases to right inflation that still is around its highest level in more than 40 years.

Over the past week, the news has gotten at least incrementally better: The consumer price index rose a less-than-expected 0.4% in October, while the producer price index increased just 0.2%. Both price measures are off their highs, running at respective annual rates of 7.7% and 8%, but still well above the Fed’s 2% target.

Daly said she saw an easing of core goods inflation as “positive news” and is encouraged by the general slowing in the economy.

“Consumers are stepping back, they’re changing how they allocate spending. They’re dealing with high inflation, of course. They have to make trade-offs, put things back that they would otherwise get. But they’re also preparing for a slower economy,” she said. “That’s a very good start.”

Yet data Wednesday showed that spending is keeping up with inflation, as retail sales rose a slightly better than expected 1.3% in October. Early data is showing GDP is accelerating at a 4% pace in the fourth quarter, according to the Atlanta Fed.

Daly said she expects higher rates to continue to have an impact on the economy and bring inflation back in line.

“When we raise it and hold, over time as we’re holding monetary policy is becoming tighter as inflation comes down, so that’s another factor we’ll have to consider,” she said.

She added that her goal is to bring inflation down “as efficiently and as gently as we can.”

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Article: cnbc.com

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Binance CEO Says Crypto ‘will Be Fine’ and Announces Industry Recovery Fund

Rebekah Fuller

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BUSD.CM=

The CEO of the largest online exchange for trading cryptocurrency, Binance, said he is establishing a recovery fund to help people in the industry, while saying the sector “will be fine.”
Ben McShane / Contributor / Getty Images

The CEO of the largest online exchange for trading cryptocurrency said Wednesday that he’s establishing a recovery fund to help people in the industry while saying the sector “will be fine.”

“We want the strong industry players today to protect the good industry players who might just be hurt short term,” Binance CEO Changpeng Zhao said during an interview with CNBC’s Dan Murphy at Abu Dhabi Finance Week.

“That’s not to say we can save everybody. If a project is mismanaged on multiple fronts we won’t be able to help them anyway.”

Zhao said cryptocurrency had “shown extreme resilience,” suggesting he didn’t expect recent turbulence in the industry to cause long-term damage. He did not specify an exact figure for the size of the recovery fund.

His comments come just a week after Binance backed out of a deal to rescue rival exchange FTX, which declared bankruptcy Friday.

The price of bitcoincould lead to the downfall of other big industry names, such as Crypto.com. The company’s CEO denied the claims and said the platform was “performing business as usual.”

“Short term there’s a lot of pain but long term it’s accelerating the efforts we’re making to make this industry healthier,” Zhao said.

The CEO on Monday said Binance had seen a “slight increase in withdrawals” in the last week, but he said this was in line with other dips in the market.

“Whenever prices drop, we see an uptick in withdrawals,” Zhao said. “That’s quite normal.”

Regulations will help, but they won’t fix everything

Zhao said he wants to form an organization that could “establish best practices” across the industry, which is known for its lack of regulation.

“Regulations need to be adapted for this industry,” Zhao said. “Regulation won’t fix all of this, it will reduce it. It’s important but we’ve got to have the right expectations,” he added.

Zhao reflected on how there were elements of traditional finance that could help the cryptocurrency market to become more regulated and better trusted, but practices would need to be adapted to be fit for purpose.

The “transparency” and “audit” aspects of traditional finance could benefit the crypto industry, but there are “subtle but very important” differences that would need to be made, according to the CEO.

“Too many regulators are more of a traditional mindset, they need to get a crypto mindset,” he said

The comments echo those made by Ripple CEO Brad Garlinghouse, who said the idea that crypto is “not regulated is overstated,” but that “transparency builds trust.”

“Crypto has never just been sunshine and roses and as an industry, it needs to mature,” Garlinghouse said on CNBC’s “Squawk Box Europe” Wednesday.

Economist Nouriel Roubini took a different line in his Abu Dhabi Finance Week interview and described crypto and some of its major players as an “ecosystem that is totally corrupt.”

The New York University professor said there were “seven Cs of crypto”: “Concealed, corrupt, crooks, criminals, con men, carnival barkers,” and finally, Changpeng Zhao himself.

— CNBC’s Jenni Reid and Ryan Browne contributed to this report.

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Original Post: cnbc.com

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