Meta Platforms Inc – the company that owns Facebook, Instagram and Whatsapp – is reportedly preparing to lay off thousands of staff as the social media giant reels from a poor financial outlook for the year ahead.
The measures could be announced as early as Wednesday, according to the American newspaper The the wall street journal reported Sunday.
Meta CEO Mark Zuckerberg already said in October that the company’s workforce, which numbers around 87,000 people, could shrink by the end of 2023.
Why is Meta laying off thousands of employees?
The tech giant has had a rough year after losing half a trillion dollars in value by market capitalization. In October, the company reported a 52% year-over-year decline in third-quarter earnings and a disappointing outlook for the holiday quarter as well as additional costs in 2023.
This led Meta’s share value to plummet by around $67 billion (€67.4 billion), losing about a quarter of its stock price in one day.
The company’s woes come as advertisers cut budgets amid rising inflation.
The belt-tightening also raised questions about Zuckerberg’s new high-cost project, the Metaverse, which he says will only pay off in about 10 years.
The struggling tech industry
Meta is not the online platform company that is downsizing to deal with a troubling economic situation.
Other Silicon Valley companies such as Stripe and Lyft announced mass layoffs last week, while online retail giant Amazon said it would put corporate hiring on ice.
Facebook’s social media rival Twitter also recently laid off around half of its 7,500 employees, shortly after billionaire Elon Musk finally completed his purchase of the company.
Musk – who said the platform was losing more than $4 million a day to justify the decision – is now facing legal action over the abrupt mass layoffs. Musk also blamed activist groups for pressuring advertisers to stop spending on Twitter amid concerns over its content moderation under the so-called free speech absolutist.
Confusion over the company’s future under the new boss deepened further on Sunday, US media reported, as dozens of fired Twitter employees were urged to return, some were said to have been fired in error and others before new management realized how vital their roles were.
ab/msh (AFP, Reuters)