Facebook’s Mark Zuckerberg Firing 11,000 after Company Spends $15B on Metaverse

Zuckerberg explains why he feels this is necessary and points the finger at Covid, a universally useful gimme. Except that Covid was too good for them as a company. The boss, who is not taking a pay cut, cites “outsized revenue growth” as a result of people spending more time (and more money) online during lockdowns. He also says, “Many people predicted that this would be an acceleration that would continue long after the pandemic was over.” So I decided to increase our investments.

Zuckerberg states that this did not happen “Unfortunately”

He also mentions the “macroeconomic decline, increased competition and ads signal loss”, saying that these have all resulted in much lower revenue than anticipated. He then states, “I made this mistake, and I accept responsibility for it.”

He doesn’t mention that Reality Labs was the disastrous metaverse project that the company’s developers didn’t want to use. If the metaverse can be considered to have one, it is to create an online VR space that people want to use. However, this has yet to prove popular or profitable.

The project has seen an average quarterly revenue drop to $30 million with $15 billion spent since 2021. This seems like an elephantine subject that Zuckerberg has left out. Not least because he claims that he’s “shifted more resources onto a lower number of high-priority growth areas,” which is incredibly inclusive of “our long-term vision of the metaverse.”

Meta was contacted by us to inquire about this and to find out why Zuckerberg didn’t mention this spending in his memo. Their only response was to point us to the memo they were referring to.

Fired employees will receive 16 weeks of base salary, plus two additional weeks’ pay for every year of employment. They also get all of their paid time off. They will be able to get six months of health insurance, three months of career support, as well as immigration support for their families. Similar support will be provided to overseas employees.

However, affected staff will find their access to Meta systems has been cut off. They’ll still be able to use their email address for the rest of their day.

Meta also announced drastic cuts. Desk sharing will be offered to staff who work mostly from home. Real estate is being sold and there’s an end-of-year hiring freeze.

Zuckerberg admits that “this is a sad time” and acknowledges that those who have decided to leave will worry about the future. In trademark hubris, Zuckerberg says that he is laying off 13% of his staff. He then adds, “I believe that we are deeply underestimated today as a company,” possibly referring to the fact that shares of Facebook have fallen by 30 percent from their level at the beginning of 2022.

This firing comes shortly after Twitter’s new owner Elon Musk dismissed half of his workforce. Zuckerberg did send a politely sarcastic memo to his staff and offered decent severance. Instead, Musk chose to tweet memes and do it so badly that the company is already trying to hire people it fired. Meta and Facebook are part of a wider trend in tech, with companies such as Google drastically cutting back on spending after the recession.