Meta, formerly Facebook, has been more passionate about the Metaverse than any other firm. However, despite spending vast sums of money on the initiative, Meta’s strategies have proven futile. Mark Zuckerberg, CEO of Meta, revealed on November 9, 2022, that the firm was cutting off 13% of its staff, equal to 11,000 employees, out of a total global workforce of 87,000. Below, we have discussed the reasons behind this move.
Why did Meta Decide to Lay Off Employees?
Zuckerberg sent an apology-filled statement to his staff, as was verified in a statement on Meta’s website. The multi-billionaire CEO said, “Today, I’m revealing some of the most challenging decisions we’ve ever made at Meta. I’ve decided to shrink the size of our workforce by around 13% and let over 11,000 of our great people go. I want to accept responsibility for these choices and how we arrived here.”
He further wrote. “I know this is difficult for everyone, and I’m apologetic to those affected in particular.” The layoffs will affect workers at every organization under Meta’s management, including WhatsApp, Instagram, and Facebook, along with its Reality Labs division for AR and VR.
According to an Insider research report, Meta spent $36 billion on Reality Labs between the beginning of 2019 and September 30, 2022. The division experienced a combined loss of $30.7 billion throughout that time.
Zuckerberg expected that the Metaverse would quickly kick off and wanted his firm to be the first to reap the benefits of the popularity of the Metaverse. However, the concept has yet to capture public attention because the Metaverse has poorly designed elements, and the progress in the space has been extremely slow despite major investments in the arena.
Meta Offered Better Assistance to Its Employees
Twitter’s approach to layoffs is different from Meta’s. No specific person’s signature appeared on the official Twitter note informing employees of the layoffs. Additionally, neither Twitter’s top executives nor its newly appointed CEO, Elon Musk, published any post outlining the specifics of the layoffs.
According to Musk, Twitter provided people who were dismissed with three months’ worth of severance pay. There are a few specifics about healthcare services as well. However, Meta was more generous towards its employees. For example:
- Employees who are laid off are eligible for a maximum of 16 weeks of basic salary and two extra weeks for each year of service.
- Meta will cover all leftover paid time off.
- On November 15, 2022, those with restricted stock units vesting will get their shares.
- Meta will be responsible for healthcare expenses for laid-off individuals and their loved ones for six months.
- The company will provide three months of career assistance through a third-party partner and priority access to job prospects.
The Meta CEO also mentioned that the business would serve individuals with immigration needs. However, Twitter, which had about 700 H-1B recipients, did not seem to care too much about their situation.
Meta is announcing significant budget cuts. Desk sharing will be implemented for employees who do most of their work from home, and there will be a hiring freeze the following year. Zuckerberg admits that even those remaining will be concerned about the future and says, “This is a tragic moment.”
Meta’s decision to lay off the employees who were working on the Metaverse will significantly hamper the development of Metaverse. The way it stands, the future of Metaverse does not look promising.