Meta has followed through on reported layoff plans, axing 11,000 employees and earning the distinction of conducting the biggest tech layoff in 2022.
Meta is in trouble, with the company pumping billions into the metaverse at a time when its “core business hit a wall last fall.” Reports surfaced earlier this week that the company would conduct mass layoffs, rather than cut metaverse investments, and the company has done just that.
In a letter to employees, CEO Mark Zuckerberg outlined the plans and took responsibility for the decision.
Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.
I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted.
As many tech companies have done, Meta is offering employees a significant severance package. Employees will receive 16 weeks of pay, plus two additional weeks for every year they were employed, with no cap. All PTO will be paid, and the company will provide health insurance for employees and their families for six months. Meta will also provide immigration support to employees with work visas.
Zuckerberg says the company is also engaging in other cost-saving measures, such as reducing its real estate footprint, freezing nearly all hiring for Q1, and analyzing infrastructure investments in an effort to become more efficient.
Interestingly, the word “metaverse” was only referenced once in the entire, rather lengthy, letter:
In this new environment, we need to become more capital efficient. We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse. We’ve cut costs across our business, including scaling back budgets, reducing perks, and shrinking our real estate footprint. We’re restructuring teams to increase our efficiency. But these measures alone won’t bring our expenses in line with our revenue growth, so I’ve also made the hard decision to let people go.
Brad Gerstner, Altimeter Capital CEO, has been one of Mata’s most outspoken critics, despite being a major investor. He called attention to Meta’s plans to invest at least $100 billion in the metaverse over a ten-year period, saying it was “super-sized and terrifying, even by Silicon Valley standards.”
Given that many employees are losing their jobs in no small part because of Zuckerberg’s obsession with the metaverse, it’s probably a good idea he only mentioned it once in his letter.