Meta fires 11,000 employees worldwide. Zuckerberg admits his faults

Meta started the dismissal of 11,000 employees. 13% of its staff. This is the most important restructuring plan ever made by the holding company of Facebook, Instagram and Whatsapp. The layoffs, as reported by the American media, have been arranged for all company branches, even if the one to be hit most would be the human resources department.

“I want to take responsibility for these decisions and how we got to this point,” Zuckerberg wrote in a letter to employees, which arrived on Wednesday. “I know it’s hard for everyone and I’m especially sorry for those who have been hit.” Since Zuckerberg founded Facebook in 2004, the San Francisco social networking giant has seen a steady increase in the number of its employees. By the end of September, he had set his all-time record: a total of 87,314 people worldwide.

Yesterday, the Wall Street Journal anticipated the cut. Citing anonymous sources who allegedly attended a meeting between the CEO, Mark Zuckerberg, and the company’s top executives. Zuckerberg had previously admitted that he was responsible for the company’s missteps and that his excessive optimism about growth led to over-staffing, adds the WSJ.

In Zuckerberg’s letter it is evident how much the picture has changed. The pandemic boom is over. The long months of confinement, which led to the explosion of the technology sector and the value of its main companies, are now behind us. Today there are other factors: the rise in interest rates, inflation, and the return to a normality that many considered outdated.

“Not only has online commerce returned to previous trends,” Zuckerberg admits in the letter, “but the macroeconomic downturn, increased competition and declining advertising meant that our revenues were much lower than I expected.” , said the CEO.

An announced cut. Planned. Although not in these terms. That something was wrong had already been understood a few months ago. San Francisco. June 2022. Mark Zuckerberg holds a meeting with his employees. An American-style ‘Q&A’. Confidential questions and answers.

A recording breaks the secrecy: “I must confess that in all likelihood there are a number of people in the company who shouldn’t be here today.” The vowel of Meta’s number one ends up in the editorial offices of various US newspapers. He foretells what would soon happen in the entire technology sector. Which has to deal with unexpected factors up to a year ago, such as inflation and uncertainties about the future, especially due to geopolitical tensions.

But which in Meta’s case seem to weigh more. Both for the size of the company. Both for the huge investments it had to make to support the birth of the Metaverse.

Exactly one year after its creation, the new technology strongly desired by Zuckerberg burned 9 billion in cash. In other times it would have been a bearable cost. Today, in a very different macroeconomic framework, a weight that is difficult to bear.

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by Massimo Basile

04 November 2022