Meta, the parent company of Facebook, Instagram, and WhatsApp, confirmed a massive round of layoffs, which is 13% of its workforce.

"I want to take accountability for these decisions and for how we got here," CEO and co-founder Mark Zuckerberg wrote in a statement. "I know this is tough for everyone, and I'm especially sorry to those impacted."

It follows on the heels of companies throughout the tech spectrum announcing huge redundancies in recent months, including Twitter cutting some half of its 7,500 workforce following Elon Musk's takeover, and Stripe announcing last week it will trim its headcount by 14%. And just yesterday, Salesforce confirmed it had laid off "hundreds" of workers.

The round of Meta lay-offs has been quite talked about and rumoured, but we now know the full extent of company plans-and what this will mean for those that are affected.

Meta currently has around 87,000 employees worldwide, so 11,000 people will be leaving Meta. According to Zuckerberg, the severance pay for U.S.-based employees is 16 weeks of pay, plus two additional weeks for each year of service. So if someone has been working at Meta for four years, they will effectively receive six months of pay.

On top of all this, Meta said its workers also will be compensated for the remaining unused holiday time as well as some stock-based compensation that is vesting through November 15th. In the U.S., health coverage for Meta employees and dependents for six months

Internationally, Zuckerberg promised support packages "will be similar, but tailored, to be sure, for the markets concerned."

Meta-morphic
Meta's trajectory to where it finds itself today is a familiar one shared by countless companies over the past year, though the tech titan's effects are amplified somewhat by virtue of its size.

After becoming one of the few companies ever to hit a trillion-dollar market cap — right in the middle of the pandemic — the company sought a new direction in the form of the metaverse, rebranding from Facebook to Meta in the process. While it would be unfair to apportion blame for Meta's current predicament to this pivot, the company has been throwing a lot of money at a project that is nowhere near ready for prime time, with critics arguing that it was losing focus of its core business in pursuit of something that is a long way off from happening, if it happens at all.

Meta's market cap has fallen to around $250 billion today, a figure the company last saw in 2015 when it was at the height of its ascendency. The company posted its first-ever quarterly decline back in June, before confirming it was freezing its hiring plans as part of broader cost-cutting measures, with its revenue dip continuing into the following quarter too.

What's interesting, perhaps, is that Zuckerberg barely acknowledges the metaverse at all in his open letter, other than to affirm that it's a "long-term vision" that remains one of its "high priority growth areas.

Of course, there's little indication here that this ye olde Meta ship — under the stewardship of Zuckerberg — is set to change its course any time soon. He said redundancies would hit both "Family of Apps" (i.e. Facebook, Instagram, and WhatsApp) and Reality Labs, the VR and AR unit pushing its metaverse mission, but it is unclear which divisions will feel the force most: "some teams will be affected more than others," he said.

In a separate SEC filing accompanying today's announcement, Meta said that it expected reality labs' operating losses in 2023 to "grow significantly year-over-year." Perhaps that is a sign that Meta continues full throttle on the metaverse as it continues with a capex plan for 2023 still in the range of $34-$37 billion.
The Great Reset
In truth, a number of factors have gone into Meta's decline. Apple's App Tracking Transparency (ATT) framework rolled out last year and indeed hit Meta's advertising revenue as the company predicted, with Apple's own ads business benefiting as a result. And the rise of relative newcomers such as TikTok has also influenced where advertisers choose to spend their money.

But the elephant in the room here is the impact of the so-called Great Reset, a phenomenon we’ve seen in countless other places where companies that went in too deep off the back of a pandemic-driven surge in revenues were brought back down to Earth with a jolt when the boom subsided. And this is precisely where Mark Zuckerberg says Meta went wrong too, compounded by the broader economic downturn.

At the beginning of Covid, the world quickly went online and the rise of ecommerce led to outsized revenue growth," Zuckerberg wrote. "Many people predicted that this would be a permanent acceleration that would continue long after the pandemic ended. I did too, so I decided to significantly accelerate our investments. Unfortunately, this did not play out as I had hoped.". Not only has e-commerce gone back to trends it followed earlier, but macroeconomic slowdown, increased competition and loss in ads, this all resulted in much lesser revenues than I could have ever expected. I made a mistake and am accountable for that." End
Layoffs aside, Meta also said it is reviewing its infrastructure spending to optimize its capacity efficiency, as it looks to "shrink its real estate footprint," which means more desk-sharing for employees who rarely visit an office. What's more, its hiring freeze will now extend into early 2023, with only "a small number of exceptions.

"I am going to monitor our business performance, operational efficiency and other macroeconomic factors and see whether we should start hiring and how much at that time," wrote Zuckerberg. "This would enable us to better control the cost structure if this economic recovery does not sustain. This would also position us toward having an efficient cost structure than what we communicated recently to investors.