Is the Metaverse to blame for Meta's layoff of 11,000 employees?
Layoffs in the tech industry continued Wednesday, as Facebook's parent company, Meta, announced it was parting ways with more than 11,000 employees, around 13 percent of the brand's staff.
In a letter announcing the decision, Meta CEO Mark Zuckerberg blamed the decision on a surge of e-commerce during the COVID-19 pandemic that saw the company make strategic errors in investments. "Unfortunately, this did not play out the way I expected," Zuckerberg said. "Not only has online commerce returned to prior trends, but the macroeconomic downturn ... [has] caused our revenue to be much lower than I'd expected."
Beyond the layoffs, Zuckerberg also said Meta would take additional steps to "become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
These layoffs were not completely unexpected, due to similar layoffs being seen across the industry, and Reuters reported the firings were Meta's first in its 18-year history.
Despite this, some experts looked to the move as a potential warning sign for the company, especially given Zuckerberg's controversial decision to focus significantly on his virtual-reality "Metaverse" as the brand's future. Many pundits decried Zuckerberg's focus as the true cause of the brand's financial issues, given that the company has spent more than $10 billion on the Metaverse this year, per SEC filings.
"This is a company with too much money and too little original or innovative thought," The New York Times' Farhad Manjoo wrote in an op-ed. "It's burning billions on a party that nobody wants to attend."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Justin Klawans has worked as a staff writer at The Week since 2022. He began his career covering local news before joining Newsweek as a breaking news reporter, where he wrote about politics, national and global affairs, business, crime, sports, film, television and other Hollywood news. Justin has also freelanced for outlets including Collider and United Press International.
-
The Pentagon faces an uncertain future with Trump
Talking Point The president-elect has nominated conservative commentator Pete Hegseth to lead the Defense Department
By Justin Klawans, The Week US Published
-
This is what you should know about State Department travel advisories and warnings
In Depth Stay safe on your international adventures
By Catherine Garcia, The Week US Published
-
'All Tyson-Paul promised was spectacle and, in the end, that's all we got'
Instant Opinion Opinion, comment and editorials of the day
By Justin Klawans, The Week US Published
-
Racist texts tell Black people in US to prepare for slavery
Speed Read Recipients in at least a dozen states have been told to prepare to 'pick cotton' on slave plantations
By Peter Weber, The Week US Published
-
Australia proposes social media ban before age 16
Speed Read Australia proposes social media ban before age 16
By Peter Weber, The Week US Published
-
FTC bans fake online product reviews
Speed Read The agency will enforce fines of up to $51,744 per violation
By Peter Weber, The Week US Published
-
States sue TikTok over children's mental health
Speed Read The lawsuit was filed by 13 states and Washington, D.C.
By Rafi Schwartz, The Week US Published
-
Instagram rolls out teen accounts with new limits
Speed Read After facing pushback over child safety, Meta announced that all users under 18 will have their Instagram accounts modified
By Peter Weber, The Week US Published
-
Meta agrees to $1.4 billion settlement with Texas
Speed Read The parent company of Facebook and Instagram stands accused of using facial identification software without users' permission
By Rafi Schwartz, The Week US Published
-
Threads turns one: where does the Twitter rival stand?
In the Spotlight Although Threads is reporting 175 million active monthly users, it has failed to eclipse X as a meaningful cultural force
By Keumars Afifi-Sabet, The Week UK Published
-
Is the AI bubble deflating?
Today's Big Question Growing skepticism and high costs prompt reconsideration
By Joel Mathis, The Week US Published