Zuckerberg says he ‘got this wrong’ as Meta lays off 11,000 employees
The company grew significantly during the Covid tech boom. Now it’s letting go of around 13% of its workforce.
Meta has announced sweeping layoffs for the first time in its history / Adobe Stock
Meta announced this morning that it will be laying off more than 11,000 employees – roughly 13% of its global workforce. This is the first time in the company's nearly 20-year history that it has been forced to let go of a sizable portion of its workforce.
The news arrives at the tail-end of a difficult year for Meta, which – like other tech giants – has recently been beset by sweeping changes in the ad landscape, as well as historically high interest rates and inflation. By the end of Q3, Meta’s stock had plummeted by around 70% since the beginning of 2022.
Twitter, under the new management of Elon Musk, also recently announced the company would undergo significant layoffs.
In a letter to employees published this morning, Mark Zuckerberg – Meta’s founder and chief executive – said that the pandemic-era surge in e-commerce and online activity had sparked enthusiasm throughout the tech world that high times for growth lay ahead. “Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” he wrote. “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.”
Facebook, founded in 2004, changed its name to Meta in October 2021 to signal the company's new focus on the metaverse.
Shareholders have recently begun to voice their discontent about the direction in which Zuckerbeg has been steering the ship. In October, one prominent investor wrote in an open letter to Zuckerberg that Meta’s investments of $10bn to $15bn per year in metaverse-related projects, which by the company’s own estimation could take as long as a decade to come to fruition, “is super-sized and terrifying, even by Silicon Valley standards.” The author of that letter suggested that the company reduce its metaverse expenditures to a cap of $5bn per year.
In his letter to employees, Zuckerberg wrote that the severance packages for those who are laid off will include 16 weeks of base pay plus two additional weeks for every year of employment with the company, as well as six months of healthcare coverage, shares that were slated to vest on the 15th and other resources.
Layoffs are being made across the company’s Family of Apps and Reality Labs quadrants. The recruiting team “will be disproportionately affected since we’re planning to hire fewer people next year,” Zuckerberg wrote, as will the business teams. “This is not a reflection of the great work these groups have done, but what we need going forward.”
Zuckerberg has not given any signal that he intends to roll back his expensive ambitions for the metaverse; only time will tell whether this is a catastrophic misjudgment of public interest, or a prescient long-term strategy that ultimately pays off.
“Meta bet big on the metaverse, but its vision for the future of the internet may be too far flung for the average consumer and advertiser,” Thomas Walters, founder and chief executive of global creative agency Billion Dollar Boy, said in a statement. “It brings into question the research that informed the rebranding last year. While we know that Meta needed to protect itself from the negative reputation surrounding Facebook, it was also motivated by a shift toward virtual reality (VR). But rather than focus on the evolution of the internet, Meta has tried to sell in a revolution. For many it represents an overly-ambitious gear shift from one version of the internet to another.”
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