Meta CEO Mark Zuckerberg recently made headlines regarding the laying off of 11,000 Meta employees, citing his incorrect prediction that ecommerce growth during the Covid-19 pandemic would be a ‘permanent acceleration’.
In a statement, Zuckerberg admitted he was wrong and that assumption cost Meta a lot of money and a lot of people their jobs.
The Meta boss said he is cutting costs across other parts of the business too, including scaling back budgets, reducing perks and shrinking Meta’s real estate footprint.
“I got this wrong,” added Zuckerberg. “And I take responsibility for that.”
Zuckerberg Says Ecommerce Trends After Pandemic Led to Mass Layoffs
Zuckerberg wasn’t alone in predicting greater ecommerce growth once the pandemic sufficiently resided, with the ecommerce growth during Covid-19’s peak widely expected to become the latest ‘new normal’. However, now most Covid-related restrictions have been lifted, people have once again embraced shopping in-person.
Ecommerce Slowdown Hits Meta’s Bottom Line
In an open letter to Meta employees, Zuckerberg explained that online commerce has now returned to prior trends, plus there has been an macroeconomic downturn. Along with an increase in competition and other unforeseen setbacks, Meta’s revenue has been a lot lower than expected. The revenue loss is ultimately what has led to Zuckerberg’s decision to lay-off so many employees, with the 11,000 representing around 13% of the Meta workforce.
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In-Person Shopping Revival
While ecommerce in general is doing just fine, the slowdown after Covid-19 has been obvious since earlier this year. The International Monetary Fund were reporting in March that the pandemic’s ecommerce surge had proved to be ‘less persistent’ while online spending spikes were ‘dissipating overall’. That trend has continued, with in-person shopping proving to be far more resilient than many had thought.