Meta, owner of Facebook, WhatsApp and Instagram, is preparing thousands of layoffs in what will be the largest staff cut in its history, as reported by the Wall Street Journal. The company, founded in 2004, currently employs around 87,000 workers globally. The scope of the departures will be known this Wednesday.
Company co-founder and CEO Mark Zuckerberg recently said the company would focus on investing in "a small number of high-priority growth areas." That will mean that while some areas will see the squad increase, "in most of the rest of the teams it will be maintained or reduced in the coming year." The personnel adjustment plan joins austerity measures such as canceling non-essential trips from this week, in the midst of a notable rise in costs (19% in the last quarter).
After the pandemic broke out and with the planet launching itself into the online world, Meta hired 27,000 workers between 2020 and 2021. Now, after the reopening, there are plenty.
Neither users nor investors buy Zuckerberg's metaverse plan and that advertising falls. Result: the company's share price sinks. Following disappointing results, the stock has lost 75% of its value since September 2021, when it hit all-time highs. Another of the alarms was the first loss of Facebook users in its history, at the beginning of the year.
According to the latest accounts presented, the group's third-quarter profit fell by more than 50%, to 4,433 million euros, revenue fell -4.5% to 27,956 million, while costs increased by 19 %. Its main source of income, advertising, is falling due to the doubts of advertisers, who cut investment due to economic clouds.
It also besets increased competition, especially from Apple (and its restrictive app store policy), and long-term investment in the metaverse. "Our products seem to be working better than some comments suggest," Zuckerberg tried to clarify in his meeting with analysts after presenting results.
Technology firms live in turbulent times. In the midst of a wave of layoffs on Twitter after the landing of Elon Musk - he has cut half the workforce - companies in the sector face an uncertain environment with the possible arrival of a recession and the rise in rates, which punishes their indebtedness.
