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Metaverse Dream Dead in the Water as Facebook Fires 11,000 META Employees

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Quick Take

  • Meta had never seen a quarterly decline in the number of employees since its inception. This will change with the Q4 reports.
  • The earnings of Meta are down by more than 24% since it got rebranded.
  • Facebook to prioritize long-term vision for the metaverse. The stock of META is up by 7% today.

Mark Zuckerberg-led Meta (Facebook) has announced a massive layoff of 11,000 employees. Is the future gloomy for Metaverse or Virtual worlds?

The co-founder and CEO of Meta (AKA Facebook) announced today that they would have to let go of 13% of their workforce, which is more than 11,000 employees. 

I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1. I want to take accountability for these decisions.Mark Zuckerberg.

The impact on Facebook since its rebranding.

Last year around Oct. end, Facebook rebranded to Meta. Since then, the earnings of Meta have been in a down run. In 2021, Meta reported earnings of $46.75 Billion, which is now down by more than 24% to $35.13 Billion in 2022, according to companiesmarketcap.com. The earnings are down back to 2020 levels. 

The price of FB stocks is down by nearly 70% since their rebranding to Meta. The stock is trading at $103 from its price of $341 in Nov 2021.

Source: TradingView

Is the dream for Metaverse dead in the water?

The metaverse got a boost when one of the largest social media companies, Facebook, rebranded to Meta last year. There was a spike in the interest for Meta, and metaverse-related tokens like Decentraland rallied. But, the 2022 bear market has led many to question whether the dream for the metaverse is dead in the water.

Decentraland’s native token Mana is down 90% from its Nov. 2021 highs, whereas SAND is down 92%. There are reports of shallow daily active users in leading metaverse projects like Decentraland and Sandbox. The community finds these numbers horrendous compared to Web2 games like Grand Theft Auto V or Counter-Strike.

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But, on the other hand, more and more brands are filing trademark applications for metaverse and related services. In 2022, 4997 US trademark applications were filed for metaverse and virtual goods/services. Most recently, luxury watchmaker Rolex filed trademark applications for NFTs, NFT marketplaces, and related services.

Facebook aims to prioritize a long-term vision for Metaverse.

In Mark Zuckerberg’s message to Meta employees, he explained how the layoffs were the last resort. They want to take more steps to become a leaner and more capital-efficient company.

In this new environment, we need to become more capital efficient. We’ve shifted more of our resources onto a smaller number of high priority growth areas — like our AI discovery engine, our ads and business platforms, and our long-term vision for the metaverse.Mark Zuckerberg

There have been many developments towards Web3 in the apps owned by Meta. Most recently, Meta announced that users could create and sell NFTs on Instagram.

Did Meta require the sheer number of employees? 

Meta reported 87,314 employees in Q3 2022. Since its inception, Meta never had a quarterly decline in the number of employees. The number of employees has risen exponentially since 2012; this will change next quarter, though. 

The ex-employee of Facebook, who worked when it was just a team of 200 employees, believes that businesses like Twitter and Meta do not require that many people. Another software engineer believes that 50% of people do nothing in big tech companies.

Even Mark Zuckerberg quoted at a companywide meeting:

“Realistically, there are probably a bunch of people at the company who shouldn’t be here.”CRYPTOCASTER® - DECENTRALIZED FREEDOM!
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