The Wall Street Journal reported today that Meta Platforms seems to be imitating Twitter’s mass layoffs, which created a stir in the tech community. The owner of Facebook and Instagram will start laying off employees in the second week of November.
An official announcement on the layoffs, which are anticipated to affect thousands of people, is coming as soon as this Wednesday. At the end of September, the company claimed to have over 87,000 employees.
However, the company’s representatives have already instructed staff to stop making unnecessary trips starting this week.
The social media behemoth’s workforce might shrink in 2023, according to Mark Zuckerberg of Meta. The corporation was concentrating on rationalizing office space as a separate section.
Facts Behind Meta Going To Fire Staff
The upcoming layoffs would be the organization’s first significant headcount cutbacks in its 18-year history. Despite being less drastic in percentage terms than the layoffs at Twitter Inc.
The number of Meta workers anticipated to lose their jobs this past week, which affected roughly half of that company’s personnel, may have been the highest to date at a significant technological organization in a year that has witnessed a retrenchment in the tech sector.
As per Chief Executive Mark Zuckerberg’s recent statement:
The company would focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year.
On the company’s third-quarter earnings call on October 26, he remarked. Overall, they anticipate ending 2023 with an organization that is either around the same size as it is now or even significantly smaller.
Additionally, this year, Meta’s stock price has decreased by more than 70%. The firm has emphasized the deteriorating macroeconomic trends, but its expenditures and threats to its core social network business have also alarmed investors.
TikTok’s fierce competition has stifled that company’s growth in many areas, and social media platforms’ capacity to target advertisements has been hampered by Apple Inc.’s demand that users consent to Apple tracking their devices.
Moreover, a significant increase in the company’s expenses has also resulted in a 98% decrease in free cash flow in the most recent quarter. The company has invested heavily in artificial intelligence and increased computer capacity.
Both of these are necessary to advance Reels, Meta’s Instagram platform for short-form videos similar to TikTok, and to target advertisements with less information.
Dream Of The Metaverse
Meta’s efforts in the metaverse have had a rocky start in addition to the economic downturn in the advertising sector.
In the first three quarters, its Reality Labs division, which is in charge of the metaverse project and focuses on augmented and virtual reality, lost more than $9 billion.
Related Reading | Whales Move 71 Million XRP To FTX In Wave Of Exchange Transfers
The operational losses in 2023 are anticipated to increase dramatically year over year, despite the fact that metaverse-related services might take years to become profitable.
Additionally, fewer than 200,000 users per month logged into Horizon Worlds, Meta’s social virtual reality platform, which is much fewer than the anticipated 500,000 MAUs. Later, the corporation changed its objective to 280,000.