Meta lays off 11,000 employees after spending $15 billion on metaverse

Yesterday (9 November), Mark Zuckerberg announced that Meta is facing significant staff layoffs, as the decision has been made to reduce the team size by around 13%. As reported by Kotaku, in a news post on Meta’s website, it was confirmed that over 11,000 employees will be losing their jobs.

Zuckerberg claims that this is due to him making the decision to increase investments at the start of the pandemic, as he predicted that the revenue growth that was seen as the world moved online would continue on into the future. Now, he writes, online commerce is back to how it was pre-pandemic, and “macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected”. He added: “I got this wrong, and I take responsibility for that.”

Take a look at the infamous metaverse VR game, Horizon Worlds, below.

Last month, Insider reported that Meta has spent $15 billion on the metaverse since the start of 2021, which one analyst described as “concerning”. Additionally, it’s not actually known where all this money has gone. This cost wasn’t mentioned in Zuckerberg’s announcement yesterday, but he confirmed that there will be staff reductions across every organisation in the company, including Reality Labs (their virtual and augmented reality team), as he wants to ensure they’re “operating efficiently”.

Affected US employees will be given 16 weeks of pay, as well as two extra weeks pay for every year of service and their leftover paid time off. Healthcare insurance for people and their families will be covered for six months, and they’ll be given immigration support as well as three months of career support. They’ll also receive their 15 November vesting.

“This is a sad moment, and there’s no way around that,” Zuckerberg wrote. “To those who are leaving, I want to thank you again for everything you’ve put into this place. We would not be where we are today without your hard work, and I’m grateful for your contributions.”