Meta Platforms, formerly known as Facebook, began laying off 11,000 employees Wednesday, a move that impacts its presence in Kendall Square, where the company just months ago was planning a major expansion.
It’s unclear so far how many people lost their jobs at the local office. Prior to the layoff, the Cambridge office employed about 500 people, a spokesperson confirmed. They were mostly engineers and technologists, including some working on the company’s “metaverse” ambitions.
At the Meta office in Kendall Square Wednesday morning, there were no clear signs of a layoff. The company asked employees in the US to work from home on Wednesday, according to an e-mail viewed by the Globe.
Meta was founded in 2004 — when Zuckerberg was a student at Harvard — but the company didn’t open an office in the Boston area until 2013. Today, most of Meta’s local employees work in the 100 Binney St. office, though the company also has an office at One Broadway in Cambridge.
In July, Meta hit pause on a plan to triple its office space by leasing all of the floors of a building at 50 Binney St., without providing a timeline to resume. When asked this week whether Meta canceled its expansion plan, a spokesperson said they had no new updates.
Patrick Bench, founder of Boston public affairs firm Benchmark Strategies, said Meta’s slowdown in Kendall Square represents “lost growth,” and not just for potential tech jobs. He expects the move will trickle down to small businesses, from catering companies to restaurants to custodial services.
“If you’re tripling the size of a company, that means the businesses that support it need to grow to meet that demand,” he said. “We’re not just talking about technology jobs, we’re talking jobs across a number of sectors.”
In a letter to employees, Mark Zuckerberg, the chief executive of the Silicon Valley firm, took responsibility for the cuts. He said that at the start of the pandemic, Meta saw a surge in growth as “the world rapidly moved online,” so he increased Meta’s investments, assuming the trends would be permanent.
“Unfortunately, this did not play out the way I expected,” Zuckerberg wrote. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected.”
Zuckerberg also said in his letter that Meta is shrinking its real estate footprint, a decision that means employees who spend most of their time working remotely will no longer have a dedicated desk.
C.A. Webb, the former president of the Kendall Square Association, is concerned about Meta’s presence in the area, too.
“It’s the kind of thing where [Meta] may just end up cutting their losses and letting the talent in this market be remote, versus feeling the need to sustain the [offices] that they’ve been carrying,” she said.
The layoffs come as Meta’s revenue from digital advertising has fallen — and as the company has been pouring billions of dollars into building out the metaverse. The company told the Globe this summer that its Reality Labs — the group working on virtual reality, augmented reality, and the metaverse — is a “growing presence in the Boston area.”
Zuckerberg said Meta cut roles across all parts of the company, though the business and recruiting teams were affected more substantially.
Brad Gerstner from Altimeter Capital wrote an open letter to Zuckerberg and the Meta board of directors last month, urging the company to limit its metaverse spending to no more than $5 billion per year. Meta has already lost more than $9 billion on its metaverse ambitions this year.
As for the longer-term impacts on the Boston area, Bench said he’ll be watching what laid-off employees do next.
“Among those people could be the next generation of really exciting, world-changing technology companies that can be born here and grow in the Boston, Kendall Square area,” he said.