CEO and founder Mark Zuckerberg confirms the upcoming giant cut to 11,000 employees and takes responsibility for mismanagement. Up to 13% of the company’s workforce has been dismissed. What holds the future for Zuckerberg’s Metaverse project?
Zuckerberg dismisses 11,000 employees
It is the day of the big layoffs at Facebook. Meta, the holding company behind the social network as well as Instagram and WhatsApp, has announced the extent of expected cuts to its workforce. The exit plan involves cutting 13% of employees, or over 11,000 people. It is one of the biggest tech layoffs this year. With the Meta company struggling with soaring costs and a weak advertising market.
Anticipation was high, the Wall Street Journal reported on the eve of the official announcement. And that the numbers would arrive this morning was directly confirmed by founder Mark Zuckerberg to hundreds of executives. The move confirms the uncertainty for an industry that, from Twitter on down, is putting a heavy hand on its workforce.
What is happening to Meta
An environment that, after the boom of the pandemic, is resorting to the oldest of recipes to try and hold its own in the face of a physiological decline.
Which, in the case of Facebook, is added to other problems. The fierce competition of a social such as TikTok. Also, the difficulty of breaking through in the Metaverse, which instead requires huge resources. And, some changes to the rules of the iOs systems that have popped up in the revenues from advertising services.
So the New York financial community newspaper’s anticipation that the cuts would affect ‘many thousands of employees. And will probably be the largest of the year to date in the technology sector’ was not wrong.
Zuckerberg takes responsibility for the giant cut off
Zuckerberg – reports the Wsj – appeared rather hit in the mood at Tuesday’s meeting and took responsibility for the company’s missteps. Including an over-optimism that led him to overestimate Facebook’s growth and thus make his staff oversized.
“Today I share some of the most difficult changes we’ve made in Meta’s history,” he later wrote in the message to employees that accompanied the official announcement. “I have decided to reduce the size of our team by about 13 per cent and part ways with 11,000 of our talented employees. […] I want to take responsibility for these decisions and how we got to this point […]”
Meta decline, what the future holds for the Metaverse company
Meta, which had around 87,000 employees worldwide at the end of September, reported a disappointing financial performance in the third quarter, with a sharp drop in revenues and profits and a stagnation in the number of users.
At the time, Zuckerberg announced that the group’s workforce could be reduced by the end of 2023. Employees laid off in the US will receive 16 weeks’ basic salary and an additional two weeks’ salary for each year of service. The company will cover their health insurance for six months.
Meta’s layoffs follow other cuts that have already occurred in the technology sector. Last week, two Silicon Valley companies, Stripe and Lyft, announced large-scale layoffs, while Amazon froze hiring.
Twitter, recently acquired by Elon Musk, has just laid off about half of its 7,500 employees. On Wall Street, where Meta’s announcement was widely expected, the company’s stock rose just over 4% in pre-market trading.