Meta laid off 11,000 in its first mass layoff — the metaverse bet cost $46B in losses

Meta Platforms, the parent company of Facebook, Instagram and WhatsApp, grew from 48,000 employees in 2019 to 87,000 by September 2022, driven by pandemic-era revenue growth. On 9 November 2022, Mark Zuckerberg announced the layoff of 11,000 employees — 13% of the workforce — the first mass layoff in the company’s 18-year history. He said he had wrongly predicted that the surge in e-commerce would last beyond the pandemic, and that the company’s aggressive hiring had been a mistake.

The layoffs came after a brutal year for Meta’s stock, which had fallen 71% from its September 2021 peak, erasing about $700 billion in market value. The company’s Reality Labs division, which developed the metaverse strategy, had lost $13.7 billion in 2022 alone and $46 billion cumulatively since 2020. Meta’s advertising revenue also faced headwinds from Apple’s iOS privacy changes, which reduced the effectiveness of targeted ads on Facebook’s platform.

A second round of 10,000 layoffs was announced in March 2023, bringing total cuts to 21,000. Meta offered severance of 16 weeks of base pay plus two additional weeks for each year of service. The layoffs were widely seen as a correction of the pandemic-era over-hiring that had affected the entire tech industry, but Meta’s cuts were deeper than most peers because of the specific bet on the metaverse that had not produced revenue.