Meta firing 11000 employees is one of the biggest layoffs ever
Facebook, Instagram, and WhatsApp Messenger parent company Meta Platforms Inc. announced 11,000 layoffs on Wednesday morning, with CEO Mark Zuckerberg citing a “overly optimistic outlook for growth” as the reason.
The layoffs, which amount to about 13% of the workforce, will be the largest in the tech sector this year in terms of sheer numbers, despite the fact that the sector has already seen multiple waves of mass firings at major employers as tech companies, which thrived during the pandemic, experience slower growth and face major cutbacks.
Shareholders of Meta are worried that Zuckerberg will divert resources from the company’s core businesses and into developing the metaverse. In an open letter to Zuckerberg last month, Meta investor and Altimeter Capital founder and CEO Brad Gerstner suggested a 20% reduction in staff and a $5 billion reduction in annual capital expenditures.
In a letter to staff, Zuckerberg admitted that he had overestimated the company’s prospects and consequently overstaffed the company. A smaller number of high-priority growth areas, including the metaverse, were mentioned, and he admitted that resources had been reallocated.
As he put it in his letter, “unfortunately, this did not play out the way I expected. I got this wrong, and I take responsibility for that.”
Following the news of the layoffs, Meta’s stock price increased by more than 7% by 11:25am EDT on Wednesday. Concerns about the company’s spending and weak earnings have caused the stock to drop by 70% this year. As a result of reporting a decline in revenue for the second quarter, it dropped last Thursday to its lowest level since early 2016. This erased a market value of over $89 billion.
