The long-feared Big Kahuna of tech-boom layoffs, massive cuts at Meta companies Facebook, Instagram, and WhatsApp, could arrive as soon as Wednesday, and it’s beginning to feel a lot like 2001.
The San Francisco economy, and broader Silicon Valley economy, is already reeling from last week’s 3,700 layoffs at Twitter, which practically coincided with Lyft laying off 13% and Stripe laying off 14% of their respective workforces. By some estimates, at least via prominent companies whose layoffs make the news, there have been at least 17,000 layoffs so far this year — and that number may soon jump.
Meta plans to lay off employees this week, three people with knowledge of the situation said, adding that the job cuts were set to be the most significant at the company since it was founded in 2004. https://t.co/ytl8i6wLsI
— The New York Times (@nytimes) November 6, 2022
One of the biggest tech darlings of them all is reportedly about to get its very ugly and drastic haircut. The New York Times reports that Facebook parent company Meta is planning “significant job cuts this week,” adding that “job cuts were set to be the most significant at the company since it was founded in 2004.” Meta has a global workforce of 87,314 employees (“up 28 percent from a year ago,” as the Times shrewdly notes) across its platforms Facebook, Instagram, WhatsApp, Oculus, and Messenger.
Meta employees to be offered real estate in the Metaverse as part of severance package.
— Douglas A. Boneparth (@dougboneparth) November 7, 2022
KTVU adds that the layoffs are “expected to affect many thousands,“ and that “ the layoffs could happen as early as Wednesday.” As The Verge reminds us, the writing has been on the wall since this past summer’s steep decline in profits amidst their Metaverse pivot, with Meta’s chief product officer Chris Cox telling employees in an internal memo that they needed to “execute flawlessly in an environment of slower growth.”
Facebook changed its name to Meta on this day one year ago.
— Jon Erlichman (@JonErlichman) October 28, 2022
Since then, the company’s market value has declined by $622 billion. pic.twitter.com/DsCc84ascI
But the “execute flawlessly” demand clearly does not apply to the wealthiest top executives like Mark Zuckerberg. Facebook had been financially battered since they changed their name and focus to the Metaverse just about a year ago, arguably sidelining established lines of very profitable business to focus exclusively on some amateur, cartoonish VR world requiring wildly expensive headsets that no one ever asked for. Facebook investors are none too pleased with this Metaverse distraction, rightfully noting that Facebook is incinerating billions of dollars throwing good money after a seemingly silly, unproven early-stage product. It’s not that fault of the about-to-shitcanned employees that Facebook has lost $700 billion in market value since changing its name to Meta. That is squarely the fault of the executives running the show, though none will ever admit this.
The swift shift in fortunes at Facebook/Meta led major investor Brad Gerstner of Altimeter Capital to write an open letter to executives two weeks urging them to scale back investment in the Metaverse, and lay off about 20% of the workforce.
Mark Zuckerberg’s Metaverse bombs. Massive layoffs at Meta to start this week. pic.twitter.com/vWOMs36txs
— Mike Sington (@MikeSington) November 6, 2022
Yet this so-called “bloodbath” seems to only be happening in the tech industry (who got good and fat during the pandemic downturn, while the broader economy suffered mightily). Otherwise, the latest employment numbers from last Friday show the U.S. unemployment rate is only 3.7%, which historically speaking, is very, very low. The severe tech downturn seems to coincide with the introduction of this nebulous concept of Web3. And all the companies that threw money at these unproven concepts of crypto, blockchain, NFTs and virtual reality are now finding themselves facing, well, a new reality.
Related: Meta Is Downsizing Its Offices, Prefers to Call This ‘Vibe Planning’ [SFist]
Image: PARIS, FRANCE - OCTOBER 28: In this photo illustration, the Facebook logo is displayed on the screen of an iPhone in front of a Meta logo on October 28, 2021 in Paris, France. This October 28, during the Facebook Connect virtual conference, Mark Zuckerberg announced the name change of Facebook, believing that the term Facebook was too closely linked to that of the platform of the same name, launched in 2004. It is now official, the Facebook company changes its name and becomes Meta. (Photo illustration by Chesnot/Getty Images)