Meta will lay off 11,000 workers, or 13% of its workforce. Mark Zuckerberg disclosed the news in a blog post, stating he overestimated Facebook’s growth based on a pandemic spike. The layoffs are the first broad job cuts since Meta’s founding in 2004.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” said Zuckerberg. “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.”
Zuckerberg claimed the business will be “leaner and more efficient” by cutting spending and staff and shift more resources to “a smaller number of high priority growth areas,” including ads, AI, and the metaverse.
TikTok’s success and Apple’s privacy rules have hurt Meta’s ad revenue, and the company’s investments in the metaverse appear unwise. Meta has lost $9.4 billion on its metaverse technology in 2022 and plans to spend considerably more. Horizon Worlds is so buggy and unpopular that Meta’s management had to shame staff into using it.
Meta isn’t the only tech company with layoffs. Salesforce laid off hundreds of people last week, Snap recently reduced its workforce by 20%, Twitter recently let go of thousands of employees.
The Meta CEO ended his memo to staff with a message to outside observers wary of the company’s metaverse effort.
“I believe we are deeply underestimated as a company today,” wrote Zuckerberg. “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.”