MENLO PARK, Calif. (KGO) -- Facebook parent Meta is laying off 11,000 people, about 13% of its workforce, as it contends with faltering revenue and broader tech industry woes, CEO Mark Zuckerberg said in a letter to employees Wednesday.
A source says Meta will potentially end the leases at its main San Francisco office, as well as offices in New York and Austin.
Sources close to ABC7 News confirm that Meta is expected to end the lease at their main San Francisco office, located at 181 Fremont St. This is 432,000 square feet of space -- equivalent to one-third of Salesforce tower. The source close to the matter says it has been in talks with Meta over the past week.
Meta's two main San Francisco offices will now reportedly be consolidated into the 750,000-square-foot Park Plaza location, at 250 Howard Street.
The office closing in Austin is half a million square-feet of office space, the equivalent to half of Salesforce Tower. The lease in New York is expiring and Meta is not renewing, according to our source.
The move comes just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk.
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown era because more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going outside again, revenue growth began to falter.
You can read Mark Zuckerberg's letter to employees here.
An economic slowdown and a grim outlook for online advertising -- by far Meta's biggest revenue source -- have contributed to Meta's woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, bigger decline in the fall.
Some of the pain is company-specific, while some is tied to broader economic and technological forces.
Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that there was no choice but to cut the jobs "when the company is losing over $4M/day," though did not provide details about the losses.
Meta has worried investors by pouring over $10 billion a year into the "metaverse" as it shifts its focus away from social media. CEO Mark Zuckerberg predicts the metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are bracing for a potential recession. There's also the challenge of Apple's privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also a growing threat as younger people flock to the video-sharing app over Instagram, which Meta also owns.
ABC7 News reporters Stephanie Sierra, Suzanne Phan and The Associated Press contributed to this report.
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