It was not an overnight event. Let us understand what happened and what led to this.

Why Meta was forced to fire thousands of its employee?

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Facebook parent Meta is laying off 11,000 people roughly about 13 percent of its workforce - CEO Mark Zuckerberg told employees in a letter on November 9, 2022

Apart from workforce reduction, the company also plans to cut discretionary spending and extend its hiring freeze through the first quarter.

Opt for sharing desk space among other small things.

All departing employees will receive a severance package that includes 16 weeks of base pay plus two additional weeks for every year of service.

They will also get pay for remaining PTO time, health insurance coverage for six months, career and immigration support for people on visa.

Even before this firing Meta had been taking cost-cutting measures including reducing employee perks such as free laundry, dry cleaning, and dinners employees were allowed to take home to families.

So why was Meta forced to cut costs and fire employees?  2 Reasons -  First, e-commerce trends are back to pre-pandemic levels coupled with economic downturns and competition from TikTok.

Second, Mark continuously had been investing heavily on Metaverse project. The total estimated invested is approximately $15B. Unfortunately this has not played out as he had expected.

What's road ahead for META?

Zuckerberg commented " we’re leading in developing the technology to define the future of social connection and the next computing platform. We do historically important work. I’m confident that if we work efficiently, we’ll come out of this downturn stronger and more resilient than ever."

Although he has made it clear that Meta will continue to focus on the metaverse. “We’ve shifted more of our resources onto a smaller number of high-priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse”

Image credit - adobe Express