Meta is laying off more than 11,000 employees, CEO Mark Zuckerberg announced in a statement this morning. The cuts, which amount to about 13% of Meta’s staff, mark the first time that the world’s largest social media company, which owns Facebook, Instagram, WhatsApp, and Messenger, has laid off people at scale in its 18-year history.
“I want to take accountability for these decisions and for how we got here,” Zuckerberg said in the statement. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
The cuts impact every division in the company, including Reality Labs, the department in charge of Meta’s recent pivot to virtual and augmented reality projects.
Meta’s layoffs come less than a week after social media rival Twitter, which was recently bought by Elon Musk, the world’s richest man, fired roughly half of its approximately 7,500 employees. Technology companies, both large and small, have been laying off employees since the summer amid rising inflation and fears of a recession next year. Meta’s layoffs are the largest tech layoffs so far this year.
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In July, the company’s revenues declined for the first time since it went public a decade ago, and last month, its quarterly profits shrank by more than half.
Meta, which was a trillion-dollar company in 2021, is now worth less than Home Depot after its stock dropped more than 70% in 2022, over a year after a controversial move by Zuckerberg to invest billions of dollars in building an immersive online world powered by virtual reality called the “metaverse.”
Meta’s investors have been asking the company to cut back spending on Reality Labs, the company’s division responsible for its metaverse projects. Reality Labs lost $3.7 billion in the last quarter and $10.2 billion in 2021. And in Meta’s latest earnings call, the company said that losses for Reality Labs would grow “significantly” next year.
Horizon Worlds, Meta’s own immersive universe accessible through the company’s Quest VR headset, has come under fire for having poor graphics and bugs so bad that even Meta’s own employees are barely using it.
At the same time, Meta’s core business of targeting ads has been hit: It can no longer track users on iPhones and iPads as well as it used to thanks to privacy changes Apple implemented. In addition, teens and younger adults, who once used Instagram, are flocking to TikTok, and digital advertisers have cut back spending thanks to an uncertain economic climate.
For months, Meta’s top bosses have hinted that layoffs were coming. In September, the company put a hiring freeze in place. During a weekly address to employees, Zuckerberg said that Meta would “manage out people who aren’t succeeding,” Bloomberg reported.
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg reportedly told employees at a companywide Q&A earlier this year. “And part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a bit, is that I think some of you might just say that this place isn’t for you. And that self-selection is OK with me.”
On the company’s earnings call last month, Zuckerberg said that the company would focus its investments on a “small number of high-priority growth areas.” He added, “In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.”