Meta has declared that it would let go of 11,000 workers, or around 13% of the whole workforce. In a blog post announcing the announcement, CEO Mark Zuckerberg admitted blame for being too bullish about the company’s prospects for growth in the wake of the epidemic rise.

According to Zuckerberg, “during the beginning of Covid, the world quickly migrated online and the explosion of e-commerce contributed to outsized revenue growth.” “Many individuals believed that this acceleration would be permanent and carry on long after the epidemic was over. I decided to dramatically boost our investments since I felt the same way. Sadly, things didn’t turn out the way I had hoped.

By reducing spending and employees, Zuckerberg claimed the firm will become “leaner and more efficient” and devote more resources to “a smaller number of high priority growth areas,” including as advertising, artificial intelligence, and the metaverse. According to Zuckerberg, the company’s hiring staff will be “disproportionately harmed” by the reduction. With today’s layoffs being the first significant reductions since the company’s foundation in 2004, Meta reported about 87,000 workers in September.

Why has Meta taken such a beating? Well, a predicted slowdown in the US economy has slowed momentum for many IT stocks, but the prospects of the firm have also been impacted by fierce rivalry from competitors and poor strategy.

The phenomenally profitable ad business of Meta has been squeezed by TikTok’s growth and changes to Apple’s privacy policies, and the company’s investments in the developing metaverse are beginning to appear more misplaced. As of now in 2022, Meta has lost $9.4 billion on its metaverse technology, and it anticipates spending significantly more in the future. In the meantime, Horizon Worlds, the company’s primary metaverse social network, is so unreliable and unpopular that Meta’s own management have had to intimidate staff into using it.

Meta’s stock has plummeted as the negative news has mounted. Its market worth has decreased by $700 billion over the last few weeks, and its stock price has fallen by more than 70% this year. However, the company’s stock price increased by more than 4% in pre-market trade after Zuckerberg announced the job layoffs.

However, Meta is not the only tech company experiencing significant layoffs. This week, Salesforce reported that it had fired hundreds of people; in August, Snap announced plans to reduce its employment by 20%; and, under the direction of its new owner, Elon Musk, Twitter fired thousands of employees.

Zuckeberg said in the blog post announcing Meta’s layoffs that workers in the US will get 16 weeks of basic salary plus an additional two weeks for each year of service, six months of health insurance, and assistance with finding new employment and resolving visa concerns. Through the first quarter of 2023, the business would implement a hiring freeze, according to Zuckerberg, “with a tiny number of exceptions.”

The CEO of Meta concluded his letter to staff with a statement that seemed to be directed at outside onlookers, particularly those who were dubious of the company’s foray into the metaverse.

I think that as a firm, we are presently greatly underrated,” Zuckerberg stated. “Billions of individuals connect using our services, and our communities are always expanding. One of the most lucrative companies ever founded, our main business has enormous future potential. We are also at the forefront of inventing the technologies that will determine how people will connect in the future and the next platform for computers.