Facebook will carry out its first labor adjustment in almost two decades

"Next year we will be smaller.

Thomas Osborne
Thomas Osborne
30 September 2022 Friday 16:35
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Facebook will carry out its first labor adjustment in almost two decades

"Next year we will be smaller." The phrase, pronounced by Mark Zuckerberg in the early hours of Thursday, leaves no room for doubt or interpretation. An era closes. The uninterrupted growth of Facebook (now renamed Meta) throughout these last two decades is abruptly cut short. New hires will be frozen, departments will be reorganized and their budgets will be revised downwards, which will have a cost in terms of jobs, yet to be defined.

According to Bloomberg, Meta would be including some of its employees on a "30-day list." This mechanism offers workers who are going to lose their jobs a month to find a new position within the company. If they don't, they'll have to leave. "Our plan is to steadily reduce headcount growth over the next year," Zuckerberg said. "A lot of teams are going to be downsized so we can shift that energy to other areas within the company."

The motivations in the first place are economic. "Our recent billing has been flat or slightly down for the first time," the executive acknowledged. The title on the stock market has lost more than 60% so far this year. An old glory of North American capitalism like Exxon has even overtaken him.

The problem is the advertising market, which doesn't work as well as before. There are new competitors (read Tik Tok), while users of the world's largest social network (more than 2.9 billion people according to Statista) are stagnant. According to the latest results report, Facebook's monthly active users decreased by two million in the second quarter of 2022, something unprecedented in the platform's 18-year history. In 2011 they grew at a year-on-year rate of 60%. Young people are attracted to other social networks.

To come back, Facebook entrusts everything to the metaverse, in which it spent 10,000 million dollars in 2021 alone, but the strategy is long-term and it is not yet profitable. “I expected that the economy would have stabilized by now, but what we are seeing is that it has not finished doing so, so we want to make relatively conservative plans,” Zuckerberg told his workers.

Nor personally does the entrepreneur go through a great period. Despite being the youngest billionaire in history, due to his stock market crash, he has lost almost half of his assets (about 74,000 million dollars). Zuckerberg is out of the top 10 richest for the first time since 2014, according to this week's Forbes 400 list.

And the image of the company, touched by the Cambridge Analytica privacy breach scandal, is no longer as bright as it was when it started. Facebook is out of the top 10 in Interbrand's brand value rankings: in 2017 it was worth nearly $50 billion, now it's stuck at $35 billion.