bad year of Meta will culminate in dismissal 13% of its workforce. This Wednesday, the parent company that owns Facebook, Instagram, WhatsApp and other applications has confirmed that it will lay off more than 11,000 employees worldwide, carrying out one of the largest personnel cuts in the technology industry.
In a post on the company’s blog, its founder and CEO, Mark Zuckerberg, has claimed responsibility for the layoffs saying he was too optimistic about growth prospects. “At the start of covid, the world moved rapidly online, and the rise of e-commerce led to outsized revenue growth,” she explains. “Many people predicted that this would be a permanent acceleration that would continue even after the pandemic was over. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not turn out as expected.”
In that statement, Meta has confirmed that it has restricted the access of these more than 11,000 employees to the company’s systems “given access to sensitive information.” A decision that affects employees all over the world, also in Spain. Even so, the workers of the technology giant will keep their emails for a few days “so that everyone can say goodbye.”
As he already advanced in the last presentation of results, Zuckerberg has confirmed that Meta wants to be “leaner and more efficient” and that from 2023 its corporate strategy will focus on cutting expenses and personnel and investing a greater number of resources to “a smaller number of high-priority growth areas. Those priorities are the construction of the long-awaited ‘metaverso‘, the development of their systems Artificial intelligence (IA) and recover your income for advertisingresponsible for more than 90% of its business.
critical year
The giant of the social networks lives a particularly critical year. The poor results of his business, hit by the economic turmoil but also by the changes in the privacy policies of Apple and because of the fierce competition from TikTok, They have led to the company’s stock market value plummeting 70%, a fall only surpassed in the sector by that of Snap.
In the third quarter of this ‘annus horribilis’, Meta reduced its profits by 52% to 4,400 million euros. Although it is still a money machine, Zuckerberg’s company has suffered the only two quarterly falls in its history in the last six months. All this has led to what is also the first major cut in personnel since its inception, in 2004.
glitches in the metaverse
In addition to macroeconomic conditions and changes in the digital ecosystem, Meta’s poor results are also due to the company’s massive investment in Reality Labs, its virtual reality. Unsurprisingly, building the so-called metaverse is a long-term investment. However, so far this year they have already lost some 9.2 billion dollars for that purpose.
Also, his first attempt to design that more immersive digital world, the platform Horizon Worlds, is not having the expected results. Its design flaws and unpopularity have meant that even MySpace currently has more views than what is being touted as “the internet of the future.” The sales volume of the Meta Quest 2 reality glasses is also lower than expected.
This has led to more and more shareholders of the company being concerned about this hemorrhage and have asked – even publicly – to limit this expense (of about 2,000 million dollars per month) to improve both profitability and income. The shareholder pressure does not threaten the absolute control of Zuckerberg, who owns 56.6% of Meta’s voting rights, but it does add new concerns about Meta’s reign in the digital ecosystem.