In what could be termed as one of the largest layoffs to date at a major technology corporation in a year, Facebook parent Meta Platforms Inc is preparing to cut a long line of their employees from Wednesday morning, Chief Executive Mark Zuckerberg told hundreds of executives on Tuesday.
According to the people, thousands of employees are anticipated to be laid off, and an announcement might be made as soon as Wednesday. At the close of September, Meta stated that it employed more than 87,000 people.
Meta Could Be Facing Massive Layoff After Twitter
According to the people, company management has already instructed employees to postpone unnecessary travel starting this week. The organization’s projected layoffs would be the first significant headcount reductions in its 18-year history.
The business’s chief executive, Mark Zuckerberg, recently said that the company would “focus our investments on a small handful of high-priority development areas,” but a spokeswoman for Meta declined to say further.
On the company’s third-quarter results call on October 26, he stated, “So that implies some teams will grow considerably, but the majority of other teams will stay flat or shrink over the next year.
“Overall, we anticipate that by 2023, we will be either about the same size or even a little bit smaller than we are now. On Monday morning, Meta’s shares increased 3.4% to $93.85 in trade.
The WSJ reported in September that Meta planned to reduce costs in the following months by at least 10%, in part through terminating personnel.
Following several months of more focused workforce cuts, during which time people were managed out of their positions or had their responsibilities abolished, the cuts are anticipated to be disclosed this week.
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg told employees towards the end of June.
Pandemic, Hiring Spree, And The Changing Online Trends
On a similar note, it’s important to acknowledge the hiring spree that Meta underwent during the turbulent pandemic period. Between 2020 and 2021, the corporation hired more than 27,000 people as more facets of life and business went online.
It added 15,344 new employees in the first nine months of this year, or almost one-fourth of those hired in the most recent quarter.
Over 70% of Meta’s stock has been lost this year. The company’s spending, probable threats to its primary social network business, as well as the companies spotlighting of deteriorating macroeconomic conditions have worried investors.
The company’s growth has stalled in several locations as a result of TikTok’s tough rivalry and Apple Inc.’s requirement that customers provide their authorization for Apple to follow their devices. This has limited the ability of social media networks to target advertisements.
In an open letter to Mark Zuckerberg last month, investment company Altimeter Capital urged that Meta should reduce staff and scale back its plans for the metaverse in light of the growing anger among shareholders.
Additionally, Meta’s costs have increased substantially, which resulted in a 98% decrease in free cash flow in the most latest quarter. The company’s expenses include significant expenditures in the additional computing power and artificial intelligence necessary to improve Reels, Meta’s Instagram platform for short-form videos similar to TikTok, and to target advertisements with less data.
But according to information from trustworthy sources, Zuckerberg’s dedication to Reality Labs, a section of the business in charge of developing virtual- and augmented-reality headsets as well as the metaverse, is the main cause of Meta’s spiraling costs.
The corporation has expended $15 billion on the endeavor since the outset of the previous year. Nevertheless, despite making significant marketing investments, customers of Horizon Worlds’ virtual reality platform have been predominantly underwhelmed.