Meta to lay off thousands of workers

Mr. Zuckerberg's company lost 70% of its stock market value, advertisers have backed out, and the cost of the metaverse and competition with Tik Tok has driven expenses through the roof.

Meta, the parent company of Facebook, Instagram, and Whatsapp, will lay off a large number of workers this week. Although the number is not yet known, thousands of employees are expected to lose their jobs, according to company sources who asked to remain anonymous.

These will be the first layoffs in the company's 18-year history. The Wall Street Journal indicated that Meta could undertake the largest number of layoffs of any Big Tech company to date. Sources indicate that Meta may let go of even more employees than Elon Musk following his acquisition of Twitter and subsequent layoffs last week. However, the overall percentage of the workforce affected would be lower.

More layoffs than at Twitter

In September 2022, Meta had more than 87,000 workers. During the pandemic, Mark Zuckerberg not only kept jobs, but hired 27,000 more employees, taking advantage of the online surge during lockdown. Furthermore, an additional 15,344 jobs have been created so far this year. This clashes with the statements of the company's owner, who has been warning since June that the company's numbers do not add up.

"So that means some teams will grow significantly, but most other teams will stay flat or shrink over the next year," he said at the time. "Overall, we expect to end 2023 with the same size, or even a slightly smaller organization than we are today." Also, "Realistically, there are probably a lot of people in the company who shouldn't be here," Zuckerberg noted.

Personal involvement with the Metaverse

There have been a number of factors that have been building up to reach this point. Meta has lost 70% of its stock market value, in addition to the loss of advertisers and competition with Tik Tok. In addition, there has been a brutal increase in expenses, mainly in two items: reels to compete with Tik Tok's short videos and, especially, investment in technology to create and maintain the metaverse, Zuckerberg's obsession and main objective for the future of the company. According to the WSJ, the company's cash flow has declined 98% in recent months.

Despite the signs and warnings from investors and analysts, Zuckerberg is not giving up on the metaverse. Instead has made a $15 billion investment to promote Horizon Wolds, the company's virtual reality platform, which has not had the expected results. In fact, it has less than 200,000 users and very few return after their first visit.

"I get that a lot of people might disagree with this investment," Zuckerberg told analysts in October, though he later reaffirmed his stance. "I think people are going to look back on decades from now and talk about the importance of the work that was done here."