STORY: Facebook’s parent company Meta said it’s letting go more than 11,000 employees - roughly 13% of its workforce - the first mass layoffs in Meta's 18-year history.
In a message to employees Wednesday, CEO Mark Zuckerberg said he got it wrong, writing: “I got this wrong, and I take responsibility for that. This is a sad moment, and there’s no way around that."
Like its peers, Meta hired aggressively during the pandemic when stuck-at-home users went on social media more. But it suffered this year as advertisers have pulled back. And costs to develop Zuckerberg’s ambitious plans for the Metaverse have ballooned. Wedbush Securities tech analyst Dan Ives says the job cuts were unavoidable.
“Facebook is spending like 1980s rock stars. And now growth has really come off significantly… I think the clock struck midnight for Facebook. You're seeing significant growth challenges and now they're cutting costs. Especially with this metaverse strategy, which is a risky bet. I think for Zuckerberg, this is going to be in our view as a moment of truth, how he navigates this.”
Zuckerberg still has high hopes for the Metaverse. Just in October he laid out his vision.
"At Meta, we're focused on building the fundamental technology that will help bring the metaverse to life, whether that's in virtual reality, augmented reality, or the social presence layer across both."
Meta’s layoffs follow thousands of recent job cuts at Twitter, Snap and Microsoft. And more could be coming.
SOT IVES “I think this is the beginning of much broader layoffs just across Silicon Valley. In fact, some darker days ahead as this recession is on the doorstep.”
Meta, once worth more than a trillion dollars, has lost more than 70% of its value in 2022 alone. But its shares rose 5% on Wednesday as a new era of cost cutting began.