Meta hired for a permanent pandemic boom, then cut 21,000 jobs in two rounds

In November 2022, Meta laid off 11,000 employees — 13% of its workforce — the largest layoff in the company's history. CEO Mark Zuckerberg announced the cuts in a memo taking full responsibility, citing over-hiring during the pandemic-driven e-commerce boom and a sudden reversal as online activity returned to pre-pandemic levels. Shares rose 7.7% on the day.

The layoff followed a brutal year for Meta. The company's market capitalization had fallen from over $1 trillion in 2021 to roughly $250 billion by November 2022. Revenue had declined for two consecutive quarters, and the Reality Labs division responsible for the metaverse bet had lost $9.4 billion in the first three quarters of 2022 alone. Apple's App Tracking Transparency policy had also cost Meta an estimated $10 billion in annual advertising revenue.

In March 2023, Zuckerberg announced a second round of 10,000 cuts as part of a 'Year of Efficiency.' Meta also closed 5,000 unfilled vacancies and flattened management layers. The total cost of restructuring was estimated at $3 billion to $5 billion across both rounds.

The layoffs were a dramatic reversal for a company that had embodied the Silicon Valley ethos of limitless growth and generous perks. Critics argued that the metaverse pivot — a $36 billion annual commitment — had forced the cuts when the core advertising business hit headwinds, while defenders said the pandemic hiring binge had made the reduction inevitable regardless.