Zuckerberg is gambling on the metaverse, and it’s costing thousands of Meta jobs
The company founder said he takes responsibility for the decision to lay off 11,000 staff. That’s not much of a concession.
Mark Zuckerberg wants you to know he takes responsibility for Meta, formerly Facebook, laying off 13% of the company’s workforce.
“I want to take accountability for these decisions and for how we got here,” he wrote in a note published overnight.
His mea culpa has been carefully crafted by the company’s zealous PR team to let readers know he is a man humbled. But Zuckerberg accepting the blame for making 11,000 people redundant is not much of a concession. After all, Zuckerberg is Meta’s Supreme Leader thanks to a special stock structure that means he can run the company as long as he chooses and do whatever he wants with it.
And he is doing whatever he wants with it. Meta has bet big on the metaverse — the vaguely defined technology, partly virtual reality and augmented reality, that Zuckerberg says is the future — and it’s putting a huge strain on the company.
Last month, Meta’s earnings revealed the company lost US$9.4 billion during the first nine months of the year on the metaverse. Zuckerberg warned to expect “significantly” more losses in 2023 while saying he is “pretty confident this is going in a good direction”.
The stakes of this decision were raised by a number of other factors. Meta’s existing money maker, advertising through Facebook and Instagram, is facing new challenges like TikTok.
The spike in tech use (and the revenue that came from that) that occurred during the pandemic was temporary.
And broader economic factors mean markets have fewer patients for hazy moonshots in the future.
This confluence of factors has meant there’s a lot more pessimism about the future of Meta. Meta’s stock fell to the lowest point since 2016 after last month’s earnings. (Stratechery’s Ben Thompson has pushed back on the scepticism a bit — but even he is less than bullish on the metaverse.)
It’s not the first time Zuckerberg has gambled on the company’s future. In 2012, Zuckerberg announced Facebook was going mobile-first. Up until then, the company had focussed resources on computers.
He all but abandoned his laptop and started working primarily from a mobile device. Product managers disabled their own desktop versions of Facebook, forcing themselves to use the mobile version instead. In meetings, Zuckerberg expected employees to present the mobile version of new products first. If they didn’t, the meeting was over. Facebook hired new iOS and Android engineers, held week-long bootcamps to get their existing employees up to speed, and embedded mobile engineers onto every product team at the company.
The rest, of course, is history. Now, Zuckerberg is trying the same thing with what he expects to be the next mobile revolution. Will it pay off? Early returns haven’t been promising. Meta’s flagship metaverse product Horizon Worlds has around 200,000 monthly active users — fewer than the population of Hobart.
Mark Zuckerberg is right. He is responsible for the success or failure of Meta. Accountability is coming even if he can’t be voted out by shareholders or the board. Regardless of the special stocks he holds, the fate of what was once the most important tech company in the world ultimately comes down to whether people are willing to log into the metaverse or not.
This article was first published by Crikey.
