Background

Meta is one of the largest corporations in the world today and there are billions of people who are using its products including Facebook, WhatsApp, and Instagram. There has been serious challenges in the financial stability of Meta and due to that reason, there has been a hiring freeze put into effect for the last several months. Recently, Meta also announced that it is laying off nearly 13% of its employee workforce in order to sustain its business model. It was announced that the company would be laying off 13% of its staff globally. The senior management at Meta also highlighted that Meta is focusing on making reductions in every aspect and department in the organization. Also, the senior management at Meta highlighted that the recruiting will be disproportionately affected because the company plans to hire very few people in the coming years.

The senior management at Meta also highlighted that the company will be extremely focused on extending its hiring freeze, and recruiting skilled people in vastly fewer numbers in the near future. The people who have been laid off from Meta and are impacted will be receiving 16 weeks of pay along with two additional weeks for every year that they have worked at Meta. The layoff compensation thus has been announced by the senior management at Meta, and also they have mentioned that Meta will be covering the health insurance for all the laid off employees for the next six months. There was also a speech that was given by Mark Zuckerberg who is the founder and CEO of Meta. He mentioned that employees must be going through a range of different emotions during this time, and he was taking the full responsibility for that decision.

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Why Meta was forced to layoff

Mark Zuckerberg also highlighted that it was one of the hardest decisions that he had to take during the decades of running the company, and especially because of the kind of impact that it will have on the employees lives who have been laid off. Mark Zuckerberg also appreciated every employee mentioning that they are talented and passionate, and each of them has played an extremely important role in making Meta the successful organization that it is today. Meta was founded decades ago, and the Silicon Valley company has been working on hiring more employees at an extremely fast rate. Due to the large number of projects and the growing number of active users at Meta, there was constant demand to maintain its hardware and software services, and provide extreme speed and performance to its consumers. There were nearly 100,000 people working at Meta at its peak.

However, with the difficult economic situation that has started taking shape, it was no longer possible to continue that extremely fast-paced hiring speed. There was also a decline in the growth rate of Meta because there was stiff competition from other social media platforms like Tiktok and Snapchat as well. Along with that, there were many data privacy challenges due to which many users were found to be leaving Meta for other apps. Hence, Meta was forced to pause its hiring for the near term, and also it started laying off people gradually, ultimately leading to one of the largest job cuts in the history of the technology sector and also for the company itself. The layoffs that Meta has been working on were being made across a variety of different teams and geographic regions.

Meta departments facing layoffs

The important departments from where employees are laid off are mostly like recruiting the technical recruiter positions and different business teams. The technical recruiter positions layoff was expected because there was not too many hiring of the candidates going on, and hence the huge demand for recruiters that was required at the time of fast-scaled growth and hiring was no longer there. Hence, Amazon has a lot of excess in the number of the actual recruiters that it needed, which needed to be laid off. There were also different divisions that were not cut as deeply, which included engineers working on critical projects like the Metaverse, and some of the immersive online experiences that are part of the long term vision of Meta.

Mark Zuckerberg also highlighted that he was taking the full responsibility of the layoff decision that has been taken by the company and how they arrived at this juncture. The senior management at Meta also highlighted that it was extremely tough situation that the company is facing. And the same situation is being faced by every company today due to the global downturn in the economy. The cuts and layoffs that Meta is experiencing is nearly three times the number of that has been taken by other corporations like Twitter. Meta has been one of the most profitable companies which had been seeing extremely fast-paced rate of growth month over month and even year over year. However, this layoff seems to be one of the largest reversal of fortune for one of the top companies like Meta in the technology sector today.

Meta advertising challenges

Meta has also been working on spending huge amounts of money over the years on advertisements, and accumulating large amount of users with exceptional growth because there was very little competition from other social media apps. Meta has also been focused on buying other companies like Instagram and WhatsApp, and has been providing all the employees who work at Meta with exceptional perks and packages. However, all this was coming at the cost of the advertisers who has been also seeing a lot of returns from the money that they were spending in Meta. Every advertiser who spent their money on Meta saw exceptional returns because Meta was excellent at providing targeted advertisements to its users. Meta was constantly collecting the data from its users and was able to refine its algorithm to show the exact specific ads which users would like to click.

However, there has been many data privacy concerns constantly coming up from different authorities, which led Meta to comply with the law and refine its algorithm. But after that, there was very little that Meta could do to show relevant ads to its users because it no longer was able to collect that data to provide targeted ads to its users. Users started seeing ads that are not relevant to them, and advertisers also saw a decline in their return on investment because users were clicking less on their ads. Thus advertisers gradually started pulling out of Meta, which led to a decline in their revenue year over year and also led to a poor app and social media experiences that Meta found dangerous and fatal.

Metaverse as long term vision

Meta was not able to recover from the experiences that its users were having and finally, it had to lay off its employees to get some financial stability to make up for the losses that it was experiencing. There was a lot of scrutiny over the data privacy practices of Meta. And there was a lot of controversial and toxic hateful content in the Meta apps, which was tainting its financial reputation and its goodwill over the years. The stock of Meta continued to climb to new peaks and highs, but ultimately it started coming down after the uncertain situations started unfolding with the layoffs. Meta has struggled financially over the last few years, and there was an immersive world of Metaverse, which also was going to take time to become profitable.

The Metaverse is one of the dream projects of the Meta senior management and especially Mark Zuckerberg. Metaverse is said to be built up of variety of components in the virtual reality segment that will allow users to connect to their surroundings in a virtual space. However, it has been said that this project will take quite some time to become profitable. And until then it will only see investments in the billions of dollars, hence there is no immediate remedy for Meta to return to its earlier highly profitable model. It has been found that there was a huge decline in the quarterly profit of Meta, even though the spending of Meta was increasing by a huge amount.

Meta optimizing growth speed

The senior management at Meta, including Mark Zuckerberg, attributed the layoffs and job cuts to growing too quickly, and they were not able to foresee the challenges that came ahead, including the global pandemic and the economic downturn. There was also a surge in online commerce that led to a big spike in revenue. The senior management at Meta also highlighted that the budget for various types of activities and departments in the company would be reduced, and also the employees who are used to getting different perks in the company will get so in a much more restrained form. Thus, employees can get lesser perks than they were used to getting earlier. The company also highlighted that they would cut back on real estate, and the workplace size might become fewer office spaces going forward.

Meta also highlighted that the laid off employees will be losing access to their corporate systems immediately, even though their email accounts will be remaining active for some time so that they can bid farewell to their colleagues and peers. Meta also highlighted that this will also lead to a cultural shift in the way that the company operates because the future of the company will be built with a much smaller group of people working on very high priority projects. Meta senior management also highlighted that there are different divisions at Meta which are extremely critical from a long term vision of the company like artificial intelligence, advertising, and the Metaverse where the company will be focusing all its money and employees on.

Metaverse and Layoff Experiences

These are some of the key areas that Meta wants to build its future on and is hoping that it will take up a critical space in the future and attract all users.The Metaverse is one of the key projects that Meta is hoping will succeed because that is the future of the social media in future. Thus senior management at Meta also expect that the social media sector will be moving fully into a virtual space where users can purchase virtual goods with real money. It is expected to be one of the key profitable environments for Meta. And hence, the Metaverse project is also part of the critical long term vision at Meta. Meta has also started to notify its European based employees regarding the job cuts and the layoffs.

Those employees who will be retaining their jobs also received emails a few minutes after those who were laid off. Many of the Silicon Valley headquarters employees describe that they were feeling very tense during those hours because they were not sure whether they will be keeping their jobs or not. Meta mentioned that there will be a severance pay that they will provide for four months along with their base pay, along with two additional weeks for every year that the employee has worked in the company. The health care package for these employees families will be preserved for the next six months after the employees have been laid off. Meta thus joins several other companies like Snapchat, which has also laid off its employees as part of the economic downturn and challenging landscape.

Meta Unchecked Growth Impact

Many of the companies in the social media segment have been growing rapidly due to the huge number of users who were joining during the work from home periods. Due to more time, people spent more time in the social media apps which led to a huge increase in the number of active users. Many of the companies have also highlighted that they were experiencing a decline in their financial revenues and results due to a decline in the overall global economy. Elon Musk was the new owner of Twitter who has also been laying off employees around the globe and have been focusing on increasing the profitability of Twitter. There are different cycles of rapid growth and decline that has been affecting the social media companies starting with Meta, Twitter, Amazon, Snapchat and TikTok.

Every company has found that times come that are extremely destructive within organizations because often employees who are working in these companies feel like they don't know where they stand in place and not exactly sure whether they will be able to keep their job or not. They were left at the mercy of the corporation senior management to decide. There has been periods where Meta was growing uncontrollably and was hiring extremely aggressively across all the departments, which led to a situation where there was a sudden need to reduce the number of employees in Meta due to the economic downturn. Hence, Mark Zuckerberg has been sharing that Meta will have to cut down on costs.

Meta cuts back employee perks

The first step that was taken by Meta was to cut back on its lavish employee perks that was provided to all Meta employees. In addition to that, the layoff plan was also being laid out and was started initially as a staggered way, but however, it was finally needed to lay off employees at Meta at an extremely rapid pace to make the situation of finances more stable at Meta. Meta was also eliminating different free services for its employees like laundry and dry cleaning. These services that were cut were contributing to the expenses of Meta. There were also other perks that were introduced like free dinner offerings that was earlier provided to employees.

There were free take home dinner available to employees and their families that was also cut off in order to save some money. The senior management at Meta also warned employees that the company was experiencing one of the worst downturns that it has experienced over multiple decades and hence the hiring freeze would be staying for quite some time. The senior management at Meta also implied that every team will be staying flat and will be shrinking over the next few years to come, because Meta will be working in an extremely streamlined and skeleton model approach.

Meta near term future

Every team at Meta thus can expect that the team size will be staying same or slightly smaller than what it is today. The company as a whole will also be shrinking in size than what it is today. The senior management at Meta also met with multiple employees and executives to discuss the layoffs. And it has also canceled the travel plans for multiple employees. Meta wanted to make sure that employees wherever possible meet with their managers in case there were teams affected by the layoffs. There has been a lot of friction that has been building with financial commitments of Mark Zuckerberg in Meta regarding his Metaverse project that was consuming billions of dollars.

However, the Metaverse project was not seeing any immediate profit and hence there was a lot of discussion regarding the future of Meta and financial viability regarding his projects that were not profitable in the near term. There are different research teams which are working for the reality labs divisions that Meta, which were also affected by the recent layoffs. At Meta, however, there were engineers who are working on Metaverse related projects who were not harmed at all. This is because Metaverse is one of the key projects of Meta and is expected to be stable, at least from a broader perspective in the near future.