The widespread retrenchment in the U.S. technology industry has thrown thousands of workers in Silicon Valley out of work, a trend greatly amplified on Wednesday by Meta Platforms, the parent company of Facebook, which announced it would eliminate 13% of its workforce, amounting to more than 11,000 jobs.
The announcement followed on the heels of major layoffs at other tech firms, most recently Twitter, which is restructuring in the aftermath of its takeover by Tesla founder Elon Musk, and also business software firm Salesforce and social media giant Snap, Inc.
Other major tech firms, including Apple, Amazon and Alphabet, the parent company of Google, have said that they will slow or curtail new hiring.
Announcing the job cuts, Facebook founder and Meta CEO Mark Zuckerberg admitted he had made an error in judgment by assuming the sharp growth in online commerce that coincided with the beginning of the COVID-19 pandemic signaled a permanent change in consumer habits.
“I want to take accountability for these decisions and for how we got here,” Zuckerberg said in a statement released Wednesday. “I know this is tough for everyone, and I’m especially sorry to those impacted.”
The move by Meta to cut costs was applauded by many investors, some of whom have been calling on the company to pay more attention to its bottom line.
Brad Gerstner, founder of Altimeter Capital and a vocal proponent of change at Meta, used Twitter to voice his approval of Zuckerberg’s announcement on Wednesday morning.
Calling the move an “important first step,” he wrote, “Innovation wins when companies are healthy and fit. The cultural mindset shift from the dangerous era of excess/free money will define the next [generation] of winners.”
Meta’s share price, which had plunged from more than $345 last November to below $89 last week, got a boost from the news. After closing at $96.48 on Tuesday, Meta shares opened the day above $100, and closed up 5% at $101.47.
Employees leaving Meta and seeking other employment in the tech sector will enter a challenging environment, given the sudden layoffs of thousands of their fellow workers across the sector.
Last week, Twitter announced it would lay off about 3,700 people, or approximately half of its workforce. The layoffs occurred in Twitter offices around the world but were concentrated in the United States. The company has reportedly asked some of the workers originally let go to return, but the overwhelming majority are expected to remain separated from the company.
San Francisco-based Salesforce announced Monday it would lay off approximately 2,500 people. That revelation came just weeks after the company’s largest competitor, software giant Microsoft, eliminated nearly 1,000 jobs in October.
This continues a trend that has been accelerating since early this year as a parade of other tech firms, including Seagate, Snap, Intel, Netflix, Shopify, Lyft and others have either cut jobs or restricted hiring.
Representative Ro Khanna, the Democratic member of Congress who represents a district including large segments of Silicon Valley, was asked during an interview with Bloomberg Television on Monday whether he thought the region would be able to “survive” the economic shock of the thousands of layoffs.
Khanna said some perspective was in order, noting that his district alone is home to companies with $10 trillion in market value and would be able to bounce back, though perhaps not without a broader economic recovery.
“I think we’re a leading indicator of some of the slowing in the economy,” Khanna said. “But I have no doubt that these companies are very resilient and we’ll come back.”
The impact of the layoffs will be particularly harsh on immigrants working at U.S. tech firms. Many hold H-1B visas, which means their ability to remain in the U.S. is dependent on continued employment by a company willing to sponsor their visa applications.
H-1B visa holders, in general, face a 60-day deadline to find a new job. If they fail to do so, they are required to leave the country.
According to data compiled by the United States Citizenship and Immigration Services, the overwhelming majority of H-1B visa holders work in the technology field. In 2019, the agency reported that of the 387,492 H-1B visa holders in the country whose occupations were known, 256,226, or 66%, worked in “computer-related fields.”
H-1B visas are disproportionately issued to citizens of India, who held 71.7% of outstanding visas in 2019. The next largest recipient are citizens of China, who held 13% of H-1B visas in 2019. Canada came in third at 1.2% and no other country’s citizens held more than 1% of the total.
In his public statement, Zuckerberg acknowledged that “this [workforce reduction] is especially difficult if you’re here on a visa.” He said Meta would have dedicated immigration specialists available “to help guide you based on what you and your family need.”
The layoffs in Silicon Valley-based tech firms have also echoed around the world, particularly at Twitter, where staff at several international offices were let go en masse.
Bloomberg News reported that Twitter laid off some 90% of its employees in India, the majority in the company’s product and engineering teams. In Ghana, the site of the company’s only office on the African continent, nearly all of the company’s 20 employees received termination notices.
Meta has several hundred employees in India, spread across Facebook and Instagram and WhatsApp, two other social media companies it owns. It was unclear Wednesday how the layoffs would affect staff there.