By Diego Ramos / Original to ScheerPost
Setting a new precedent in Big Tech, Elon Musk laid off nearly 50% of Twitter’s workforce last week following his takeover of the social media giant. On Wednesday Nov. 9, Meta CEO Mark Zuckerberg follows the same path, laying off over 11,000 employees, representing the first major round of job cuts in the company’s history.
“I got this wrong,” said Zuckerberg in a letter sent out to Meta employees Wednesday morning. The cuts amount to 13% of the Facebook, WhatsApp and Instagram parent company team and Zuckerberg says he takes accountability for the decisions made.
“I know this is tough for everyone, and I’m especially sorry to those impacted,” Zuckerberg stated in his letter.
The move comes as a part of an effort by Meta to downsize their operation, with cuts coming across the board but especially in the recruiting and business teams side of the company. Zuckerberg even mentions the company’s desire to reduce their real estate footprint stating, “We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint.”
The cuts didn’t come as a total shock given the subpar performances by tech companies in the market this year, particularly Meta. The company’s stock plummeted 71% this year, sporting a net worth of around $263.2 billion, almost a third of its September 2021 $1 trillion-plus valuation. “The scale of the cuts — nearly triple what Twitter announced last week — represent a stunning reversal of fortune for a once high-flying company,” The New York Times wrote.
Following the tech-heavy Nasdaq’s 32% decline this year, other companies have also announced job cuts or plans to pause hiring. “Corporate software maker Salesforce Inc. on Tuesday said it cut hundreds of workers from sales teams, while Apple Inc., Amazon.com Inc. and Alphabet Inc. have all slowed or paused hiring. Snap Inc., parent of rival app Snapchat, is also scaling back, saying in August that it would eliminate 20% of its workforce,” said a Yahoo Finance report.
Zuckerberg mentioned the significant growth Meta experienced during the pandemic and attributed the eventually debilitating increased spending to that spike. Despite that, investments in other Meta products like the Metaverse have faltered and even become subject to online ridicule.
“Meta disclosed that Reality Labs, the part of the company working on the Metaverse, had $3.67 billion in operating losses. Reality Labs also experienced its lowest revenue since the final quarter of 2020. The company expects the operating losses for Reality Labs to increase next year,” said The Times.
Zuckerberg’s ownership through a special stock structure allows him to have sole possession of the direction Meta proceeds in and unlike John Foley, an executive from Peloton who had to step down following economic mismanagement, Zuckerberg is safe from being forced out.
The Times also wrote, “For those who have lost their job in the United States, Meta said it would pay severance of 16 weeks of an employee’s base pay, along with two additional weeks for every year a person worked at the company. Each laid off worker and their family will have health care paid for six months.”