Facebook parent company Meta on Wednesday said it is laying off 11,000 employees, marking the most significant job cuts in the tech giant’s history.
The job cuts come as Meta confronts a range of challenges to its core business and makes an uncertain and costly bet on pivoting to the metaverse. It also comes amid a spate of layoffs at other tech firms in recent months as the high-flying sector reacts to high inflation, rising interest rates and fears of a looming recession.
“Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” CEO Mark Zuckerberg wrote in a blog post to employees. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go.”
Meta’s core ad sales business has been hit by privacy changes implemented by Apple, advertisers tightening budgets and heightened competition from newer rivals like TikTok. Meanwhile, Meta has been spending billions to build a future version of the internet, dubbed the metaverse, that likely remains years away from widespread acceptance.
About that Metaverse…
This is my first time looking into what the Metaverse is and honestly I’m disappointed that I didn’t take a look at this Clown Fiesta earlier.
It’s basically Smell-o-vision all over again. Some “genius” comes up with the idea that movies and 3D worlds would be more immersive if everyone strapped a bucket to the front of their face which smelled like urine whenever a scene was happening in a bathroom. It’s Ideas Guy fake problem solving, where people come up with semi-beneficial solutions to problems that may or may not exist, ignoring all those tricky little implementation details that supposedly don’t matter.
Time and again during the interview, Zuckerberg dropped language that seemed to have been cribbed straight out of some stuffy consultancy’s 40-page insights report. He waxed lyrical about the metaverse’s ability to increase “focus time and individual productivity.” He coined the dreary formula “infinite office,” a supposedly desirable scenario in which metaverse-dwellers conjure up multiple virtual screens on their Oculus VR headsets in order to multitask like pros. Zuck was “excit[ed]” (!) about the metaverse’s potential for organizing VR office meetings.
Case in point. I’ve found myself unable to work productively with a single monitor. If there were no downsides, it would theoretically be great if there was something I could do to magically create a whole bunch more monitors for myself at very little cost. Especially if said monitors could be stacked on top of each other, made arbitrarily large and high resolutioned, and the operating system gracefully supported all of this.
Instead, even the promo material shows someone having to control their computer like a touch screen with annoying tablet style scrolling everywhere. Except it’s even worse than that, because the camera needs to track your fingers, which means that you’re essentially doing tablet scrolling but with parkinsons. It would also require Facebook to make their own operating system, since Windows doesn’t support this, nor is it on your virtual reality headset anyway. But having something work at all is just the unimportant little implementation details we were talking about earlier.
And as for Mark Zuckerberg himself…
Back to the layoffs.
Last month, the company posted its second quarterly revenue decline and said that its profit was cut in half from the prior year. Once valued at more than $1 trillion last year, Meta’s market value has since plunged to around $250 billion.
Meta is not alone in feeling the pain of a market downturn. The tech sector has been facing a dizzying reality check as inflation, rising interest rates and more macroeconomic headwinds have led to a stunning shift in spending for an industry that only grew more dominant as consumers shifted more of their lives online during the pandemic.
Meta’s headcount in September was nearly twice the 48,268 staffers it had at the start of the pandemic in March of 2020.
A handful of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic. Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.
So Facebook/Meta had to do massive layoffs and has seen their share price crater, losing an unbelievable 75% of their value in just over a year. However, they still have massively inflated headcount, because they exist in a winner take all market, where they are a natural monopoly, so it doesn’t matter.