Listen to the Article: Meta's Massive Layoffs, A Bleak Future for Metaverse?

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Meta, the parent company that owns Facebook, Instagram and WhatsApp, announced massive layoffs on November 9th that shocked the world. Approximately 11,000 employees are packing up and leaving, and that's about 13% of the company's total workforce. Meta CEO Mark Zuckerberg said he took responsibility for the company's mistakes. Not long ago, Elon Musk, who had just wrapped up his purchase of Twitter​, also announced a horrifying plan to fire 80% of the contract employees.

Predicament of Meta: Depressive Economy + Bad Decisions

There has been a wave of layoffs in many industries in 2022, not just Meta. Financial markets are the only ones bucking the trend under the impact of the pandemic. However, financial markets rely on real economy. So if the financial growth is aloof from real growth, serious results might occur when monetary policies go tightened. Just like when Fed announced a rate hike this year, they did it to rein in the inflation.

Another reason is Zuckerberg's obsession of his own ideas. At first, he rebranded the company as Meta before he went all in the metaverse, yet had little thoughts on what might happen when things go south. A company should never simply rely on venture capital to raise funds, a stable income is the foundation of good growth. But so far, we are not seeing a lot of people paying for the Zuckerberg's metaverse idea.

Meta Employees: "The metaverse bubble has popped"

The reason Zuckerberg's fanfare about the metaverse is probably related to Facebook's sharp decline in performance in recent years. In particular, TikTok, a short video app operated by its Chinese company ByteDance, has taken away a large number of Facebook users over the years, which in turn has affected Facebook's advertising revenue.

So in October 2021, Zuckerberg announced Facebook's high-profile rebranding plan, renaming it to Meta. The term metaverse, too, changed from a sci-fi term to something that seems already exists. With Meta embarking on this journey, a number of tech companies and financial institutions followed suit and declared their future presence in metaverse. Even some software development companies that develop VR and AR devices, started calling themselves metaverse platforms.

Now, a year later, in addition to the fact that some Meta's employees have this MMH (Make Mark Happy) project inside joke, we don't see many normal users who have figured out what kind of a "metaverse" Zuckerberg is planning to serve. In this July, Fazzaco reported that Meta has posted a second-quarter loss of $2.81 billion​ in its Facebook Reality Labs (FRL) division.

Meta Has Always Been Planning to Sell VR/AR Devices in the Name of Building A "Metaverse"

Meta's plan to make profits has always been fixated on virtual reality (VR) and augmented reality (AR) devices in spite of Zuckerberg's hype on his metaverse. In fact, these wearable devices have emerged as early as 2014, including the now-defunct Chinese technology company LeEco and HTC, both of which have made high-profile investments in the R&D of wearable devices. So essentially, Meta is serving the same old wine in a fancy new bottle.

At the Meta for Developers that took place on October 11, 2022, Meta launched the Quest Pro boasting the so-called mixed reality technology. Zuckerberg even personally introduced it, saying that "mixed reality is a major step for VR."

The Massive Layoffs Imply the Failure of Meta's Efforts to Pitch Metaverse to the Market

In recent years, the Big Five of Silicon Valley have undergone drastic changes. The trillion-dollar market cap club FAANG (Facebook, Apple, Amazon, Netflix, Google) is now AAG (Apple, Amazon, Google).

Although Zuckerberg pinned his high hopes on metaverse, Meta's stock price has fallen from the $350 level to less than $120 now (November 15) in the year since Facebook's rebranding, a drop of more than 60%. Whatever Zuckerberg had in mind to turn tide, he rushed it and failed.

There is nothing new under the sun. In fact, the eagerness to see quick success is no stranger across all lines of business, where many company decision-makers always tend to fantasize about bringing an upswing, yet ultimately nothing ever worked out.

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