Mark Zuckerberg explains why Meta sacked over 11000 employees

Eberechukwu Etike
The macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than expected.”
Zuckerberg

Mark Zuckerberg announced in a blog post that Meta, the parent company of Instagram, Facebook and WhatsApp, is laying off 13% of its workforce i.e. over 11,000 staff. This is the largest layoff in the company’s history.

In the blog post, the CEO, Mark Zuckerberg, expressed remorse for making this difficult decision. He said,

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.

Meta CEO, Mark Zuckerberg

Read Also: Meta reportedly planning to lay off “thousands of employees” this week

How it started for Meta

Layoffs have recently become common in the IT industry, and many companies have reduced headcounts. Several organisations have announced 10-50% layoffs only this month.

This week appears to be Meta’s turn, which was highly anticipated after the CEO, Mark Zuckerberg, warned employees earlier in September that the company planned to cut spending and restructure teams.

Meta had also been under a hiring freeze. Ahead of this latest decision, the Wall Street Journal stated that the CEO, Mark Zuckerberg, spoke to some employees on an executive call about the layoff plans and claimed to be accountable for the company’s decision.

According to WatcherGuru, the firm’s Reality Labs (Metaverse) division had a $3.7 billion loss in the third quarter of 2022, prompting speculation that it may be the most affected.

Read Also; Meta collaborates with Nigeria’s top creators to flex in the Metaverse

Reasons for the Meta mass layoff

Possible reasons for the Mark Zuckerberg mass layoff
Possible reasons for the Meta mass layoff- Photo Credit: The News Crypto

Many of these large tech companies that have gone on enormous layoff sprees have encountered two primary obstacles that have contributed to such decisions: the economic downturn and strong competition. Meta is now dealing with both.

In his statement, Mark Zuckerberg said that the expansions made during the COVID-19 pandemic has not worked out as predicted.

“At the start of Covid, the world rapidly moved online, and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended.”

“I did too, so I decided to increase our investments significantly. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than expected.”

I got this wrong, and I take responsibility for that.

Mark Zuckerberg, CEO Meta explaining the mass layoff

Meta is dealing with slowing global economic development, tough competition from TikTok, particularly with the Reels, Apple privacy reforms, greater regulatory pressure, and concerns about enormous expenditure on the metaverse.

Read Also: Facebook mimics TikTok with its new Feeds feature

Major layoffs in the tech industry this month

Aside from the Meta huge layoff, numerous other major internet firms have thrown off hundreds of thousands of employees since the beginning of this month. Intel reportedly cut off 20% of its workers on November 1st. Lyft laid off over 700 employees on the 3rd. Twitter cut off 50% of its personnel on November 4th, and Stripes reported 14% layoffs on the same day.

What is the future of these affected employees?

According to the blog post, Mark Zuckerberg revealed that the affected employees would get detailed emails. There are also benefits options for these individuals, including Severance for up to four months, PTO, Health Insurance, Career advice, Immigration support etc.

“This is a sad moment, and there’s no way around that. To those leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions,” he concluded.

Mark Zuckerberg also encouraged the remaining staff members to stand strong.

“To those staying, I know this is a difficult time for you too. Not only are we saying goodbye to people we’ve worked closely with, but many of you also feel uncertainty about the future. I want you to know that we’re making these decisions to ensure our future is strong.”


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