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Experts react to Meta layoffs: these are ‘self-inflicted wounds’


By Webb Wright, NY Reporter

November 9, 2022 | 8 min read

Meta announced this morning that it will lay off around 13% of its workforce. We asked experts from a variety of industries what that might mean for the company.


Meta has announced mass layoffs for the first time in its 18-year history / Adobe Stock

Earlier today, Meta announced that it will be letting go of more than 11,000 employees – the company’s first major layoff since it was founded (as Facebook) in 2004.

The tech giant is already struggling to sell its vision for the metaverse – and convince some shareholders that its sizable spending on Reality Labs (the company’s virtual reality [VR] division) will ultimately pay off. How is this latest round of bad news likely to affect Meta’s reputation among investors and advertisers? What will the company need to do in order to right the ship?

Here’s what experts had to say:

Angie Malltezi, chief of staff, Shipyard Software

Meta, like other companies, has the challenging job of balancing business objectives to drive margin and revenue growth, while delivering returns to shareholders. Like most companies at this phase in their lifecycle, it has reached a point of maturity in terms of growth and size. Thus, cutting R&D for certain projects is fiscally prudent as it can be difficult to generate healthy profitability on all fronts in a shrinking market.

But I don’t think we can infer a lot about the future of the company or industry based solely on the past few days. Beyond that Meta is acting in line with what is expected of an organization of its size under existing market conditions.

One notable observation, given the recent layoffs, is how employees are being let go and the medium in which it’s communicated to them. Leaders have the opportunity to lead with empathy. Being laid off is a stressful and oftentimes shocking experience. You can demonstrate compassion for another’s experience by providing clear and transparent communication, taking accountability for your actions as a leader and providing individuals with adequate time, financial support and resources to make their transition easier.

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Scott Luther, head of digital strategy, TRG

This has unfortunately been a long time coming. In the short term, I don’t believe we will see much impact on our client’s shifting strategies around Meta – its slowing growth is already a reflection of questions about its current situation. Our big question now is this: what does this do to its longer-term roadmap?

Meta needs a major overhaul to rebuild its infrastructure in a post-ITP and ATT world. Short term we have already accounted for the immediate issues, but if Meta has to slow down innovation, this may force us to soften planned allocations for 2023 and accelerate divesting from Meta as the primary social platform, ramping up investment across a handful of worthy complements.

Debra Williamson, principal analyst, Insider Intelligence

Meta, like many other companies, is facing a tough reality: it thought that the rise in e-commerce [sparked by the pandemic] would be sustained and would result in significant revenue from advertising, shopping and other related products. It added staff and embarked on new projects under the belief that ad revenue growth would stay elevated. But Meta also created self-inflicted wounds when it began to invest heavily in the promise of the metaverse.

Now the company needs to focus on fixing its ad business, as well as on keeping users of its flagship apps Facebook, Instagram, Messenger and WhatsApp engaged. It will continue to innovate in 2023, but those innovations will likely be less about the distant future of the metaverse and more about improving its current slate of apps. We expect the company will double down on ad products that drive commerce on Facebook or Instagram, as well as paid business messaging on its messaging apps.

Amanda Cassatt, co-founder and chief executive, Serotonin

Mark Zuckerberg isn’t wrong to be pursuing the metaverse. With people spending more time on screens, it’s only logical that we should immerse ourselves increasingly in virtual worlds, which will require updated hardware. What is wrong, from the perspective of the web3 community, is how he is going about it.

Charging creators a 47.5% fee is just the old, web2 BUMMER [“Behavior of Users Modified and Made into an Empire for Rent”] business model at work. If we are to live in virtual worlds, the data in those worlds needs to be ownable by users. If we are to transact economic value in those worlds, it should be for assets that we can own on the self-sovereign root ownership system of the blockchain, and then port interoperably between worlds.

Built on decentralized web3 rails, the metaverse has the potential to become a utopia for creators and users. But as long as Meta’s metaverse refuses users in key, early adopter markets the things they increasingly care about – such as root ownership, portability and self-sovereign identity – it could continue to be a money loser, and end up outcompeted by projects that align with their users. Decentraland and Sandbox are two excellent examples of web3-enabled metaverse worlds.

Drew Kerr, brand communications consultant, Four Corners Communications

Meta is no longer a fast-growing boy but a mature adult who has to make wiser choices, so the expectations and potential consequences are much higher. Multi-billion dollar products and hiring gambles that seem more quixotic than reality-based do not inspire confidence in leadership at Meta.

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