Meta, the owner of Facebook, WhatsApp, and Instagram, has announced to lay off 13% of its employees. Over 87,000 people will lose their jobs in the firm’s first mass lay-offs. Mark Zuckerberg, the chief executive of Meta, describes these layoffs as the most difficult changes in the firm’s history. The news came after Twitter announced cutting about half of its staff.
“I know this is tough for everyone, and I’m especially sorry to those impacted,” Zuckerberg wrote in a statement.
Zuckerberg said that many people, including himself, had predicted constant acceleration after the unprecedented increase in the firm’s revenue during the pandemic and therefore, decided to up the investment.
He said that he takes full responsibility for getting it all wrong. He explained how increased competition and the macroeconomic downturn caused a monumental decrease in revenue.
Zuckerberg informed hundreds of Meta executives of this big decision on Tuesday, as reported by the Wall Street Journal. Employees who have been laid off will be notified via emails and will get the opportunity to ask questions about the decision.
Employees working in the U.S. will get redundancy payments for 16 weeks plus a week for every year they have been with Meta. They’ll also get additional benefits, including continuance of family health insurance for six months.
Non-U.S. employees will receive similar support. The redundancy process, however, will vary depending on local employment laws.
Layoffs in Ireland and the UK are still unknown
Meta’s European branch, headquartered in Dublin, has over 3,000 employees and a large number of contractors. Meta has refused to reveal the number of layoffs it will make in the UK and Ireland. A Companies House filing, however, shows that the company had more than 5,000 employees in the UK alone as of December last year.
Kevin Poulter, an employment solicitor at Freeths, told the BBC that confidence in the tech sector had greatly diminished within a week due to Meta’s mass layoffs decision. He also emphasized that Meta must follow UK laws on layoffs.
Poulter contrasted the two massive layoffs in the tech job market, saying that, unlike Twitter’s CEO, Elon Musk, Zuckerberg was remorseful of the firm’s decision and publicly took responsibility for things going south. Poulter said that the tone of Twitter’s statement was very different from that of Meta.
Zuckerberg is not really known as a “people’s person” and publicly taking responsibility for a wrongly calculated decision is unlike him. Since his former chief executive officer stepped down in August this year, Zuckerberg has had to smooth the waters himself.
What’s Next For Meta?
Meta is planning to cut costs in all areas, including building and office expenditures. The firm’s CEO announced that the company would now focus on its long-term vision for the metaverse and other high-priority growth areas like advertising and artificial intelligence.
The creation of the Metaverse, a virtual universe similar to the physical world, could take over 10 years. This virtual world will have everything that we have in the real world, from houses to restaurants to casinos.
Zuckerberg is also being criticized for choosing his metaverse fantasy over 13% of his employees. In public opinion, Meta’s decision to lay off 11,000 employees also boils down to his dream of creating a virtual world that will be as good as the physical world.
What’s Next For The Tech Sector?
As the tech sector deals with the global economic downturn, many companies are planning to lay off employees. Amazon recently made a decision to freeze hiring in its corporate offices, while Silicon Valley companies Lyft and Stripe have issued statements about conducting large-scale layoffs.
Most of Meta’s revenue comes from its advertising business. However, the current economic downtown has forced many companies to cut ad budgets.
The tech industry is facing many challenges, including inflation, an economic slowdown, and an end to pandemic-driven growth.