Elon Musk announced that Twitter will be firing employees starting 4 November and thousands of employees could be affected by this. Now, we have Meta doing the same thing as well. It seems like layoff season is in full swing over in Silicon Valley.
Reuters reported that according to sources informed with the situation cited in the Wall Street Journal on Sunday, Meta intends to start mass layoffs this week that would affect thousands of employees.
In October, Meta, the parent company of Facebook, predicted a poor Christmas quarter and much higher costs in the coming year, which will subtract nearly USD67 billion from Meta’s stock market worth and add to the more than USD500 billion in value already lost this year.
Aside from trying to compete with TikTok, Apple’s privacy changes, worries about big expenditure on the metaverse, and the constant threat of regulation, the poor forecast for Meta comes at a time when it is already struggling with sluggish global economic development.
Meta CEO Mark Zuckerberg has stated that he anticipates the investments in the metaverse to take around ten years to pay off. In the meanwhile, he has been forced to halt hiring, end projects, and rearrange personnel in order to save expenditures.
The company has invested USD36 billion into VR and the metaverse but they suffered an operating loss of USD30.7 billion in its virtual reality division, Reality Labs, because VR and metaverse adoption is still very poor. Even Meta employees don’t want to use Meta’s social network for the VR, Horizon Worlds, citing buggy and quality issues.
In 2023, we’re going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today.
Meta, CEO, Mark Zuckerberg.
Zuckerberg had warned staff to prepare for a slowdown in the economy when the social media company announced in June that it would reduce plans to hire engineers by at least 30%.
In a previous open letter to Mark Zuckerberg, Meta’s shareholder Altimeter Capital Management argued that the company needed to streamline by eliminating positions and capital expenditures. It also claimed that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse.
