Meta’s CEO Mark Zuckerberg will lay-off thousands of workers later this week. His ambitious project, the Metaverse, will not take-off soon.
There’s big trouble in Silicon Valley, as increasingly more tech companies are forced to slash employees to keep the ship afloat. Last week, after a 44 billion personal purchase, Elon Musk acquired Twitter and immediately fired half of its staff. To improve revenues for the blue bird, he announced charges for the celebrity check-marks, only to then postpone it after severe backlash from users.
But perhaps the most struggling tech “giant” is Meta, Facebook’s parent company. CEO Mark Zuckerberg has lost 60% of his net worth in just one year, and monthly revenues have been decimated. So, Zuckerberg also decided to cut wages, and will start to lay-off employees later this week. Facebook, Instagram and WhatsApp (all under the umbrella of Meta) have more than 87.000 employees, roughly 80.000 more than Twitter before Musk.
The reasons why most tech companies are struggling have to deal with the rampant inflation and competition from Chinese social media TikTok.
However, Meta’s reason for such a terrible performance is much more peculiar. It all started one year ago, when Zuckerberg announced his ambitious Metaverse project. A virtual space where users could live a second life, parallel to the one in the real world.
The vagueness and dreamyness of the project did not appeal to neither users nor investors, and things started to go south for Meta.
What is Zuckerberg’s plan
However, recent statements by Zuckerberg imply that this was all predicted. The founder of Facebook recently admitted that the Metaverse will not be profitable for “at least a decade”, a long time in today’s fast-paced economy.
Until then, Zuckerberg plans to slash wages and revenues, stabilizing Meta at a much lower value. "In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today," he said.
This shows how much Zuckerberg believes in the Metaverse. One year ago, before the announcement, Facebook was one of the richest companies in history, having a net-value of over a trillion dollars. Today, it is worth less than Home Depot, and it keeps falling.
However, after reports of employees lay-off, Meta shares went up 3%, implying investors’ approval. Mark Zuckerberg’s bold bet might turn a profit in the late future, but it is surely a unique situation.
He is aiming down, at least for the foreseeable future. Facebook and Big Tech in general might not be a safe haven for investors anymore, not unless a huge shift happens.
