November 7, 2022
Job cuts, a plague visiting tech giants around the world and caused by the declining economy, the Ukraine-Russia conflict, and a drop in advertising money, now appear to be visiting Meta, where rumors suggest that large-scale layoffs will begin this week, affecting thousands of employees.
According to people familiar with the matter, the large-scale layoffs planned for Meta could be the largest for a major technology company this year, with an official announcement expected as early as Wednesday following a hiring freeze announced in September. Meta’s disappointing outlook comes as it grapples with slowing global economic growth, TikTok competition, privacy changes from Apple, excessive spending on Metaverse, and concerns about massive spending on Metaverse and the ever-present threat of regulation.
The parent company of Facebook and Instagram had more than 87,000 employees at the end of September, but these large-scale layoffs are likely to affect a significant portion of its workforce. According to the WSJ, the layoffs could hurt Meta even more than the mass layoffs at Twitter, which affected about half of the company’s 7,500 employees.
Despite Zuckerberg’s claim that Facebook has more active users than ever before, investors remain concerned about the company’s high-risk bet on the metaverse. Meta’s virtual reality division lost $3.7 billion last quarter and $9.4 billion this year, while the company’s stock is trading at its lowest level since 2016.
CEO Mark Zuckerberg has said he expects the metaverse investments to bear fruit in about a decade’s time, and in the meantime has had to freeze hiring, close projects and reorganize teams to save money.
The sources for this piece include an article in Reuters.
