Facebook’s Meta Group is laying off more than 11,000 employees in the largest job cuts in its history. That is about 13 percent of the workforce, CEO Mark Zuckerberg announced on Wednesday. Zuckerberg noted that he had overestimated the online boom at the beginning of the corona pandemic and had therefore boosted investments. Now, he added, however, the online business has returned to earlier trends.
Meta has the Problem that the core business with advertising in online services such as Facebook and Instagram generates less revenue than before. At the same time, the development of virtual worlds driven by founder and CEO Mark Zuckerberg under the catchphrase Metaverse is consuming more and more money.
Zuckerberg had already announced recently that the number of employees at Meta could no longer grow for the time being and could also shrink in the coming year because the group would concentrate on fewer areas.
During the last quarter alone, the Reality Labs division, which is working on the Metaverse, posted an operating loss of just under $3.7 billion (the equivalent of 3.7 billion euros).
The decline in sales accelerated. Meta is seeing itself hit by the thriftiness of advertisers, who are spending less money on online ads in the face of high inflation and concerns about the economy. Meta’s revenues fell four percent year over year to $27.7 billion. At the bottom line, profits slumped 52 percent to about $4.4 billion. The share price has been under pressure for months because investors find Metaverse’s investments too high.