Just a couple of days back Twitter underwent massive layoffs, firing around 50 per cent of its employees, now another social media company is reportedly going to travel the same path. As per a report by the Wall Street Journal (WSJ), Facebook’s parent company Meta is planning to begin large-scale layoffs this week.
Reuters reports that the layoffs will affect thousands of employees and the announcement will likely come as early as Wednesday.
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The discouraging news comes as Meta battles a sluggish global economy, TikTok rivalry, Apple privacy changes, worries about big spending on the metaverse, and the looming danger of regulation.
Meta had reduced its ambitions to hire engineers by at least 30 per cent in June, and Mark Zuckerberg had advised staff to prepare for a slowdown in the economy.
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A few months later, in October, Meta had predicted a dismal Christmas quarter and much higher costs in 2023, which as per its estimates will reduce its stock’s market value by around $67 billion and add to the more than half a trillion dollars in value already lost this year.
According to Zuckerberg, it will take around ten years for the investments in the metaverse to pay off. To save costs in the interim, he has been forced to halt employment, cancel projects, and rearrange teams.
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“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” he said last month.
Increased interest rates, rising inflation, and the European energy crisis have in recent times not only forced Twitter and Meta, to cut staff, rather several technological businesses, including Microsoft Corp., and Snap Inc., have also reduced employment in recent months.
