The Wall Street Journal reported on Sunday, citing people familiar with the matter, that Meta Platforms Inc. expects to begin widespread layoffs this week, affecting thousands of employees. An announcement is likely as early as Wednesday.
Meta Platforms elected not to comment on the WSJ report. In October, Meta Platforms, Facebook’s parent firm, forecasted a poor Christmas quarter and considerably higher costs in 2019, which will diminish Meta’s stock market value by roughly $67 billion and add to the more than $500 billion in the value already lost this year.
The poor outlook comes as Meta Platforms grapples with the global economy’s decline, TikTok’s rivalry, Apple’s privacy enhancements, concerns about large spending on the metaverse, and the continual threat of legislation.
According to CEO Mark Zuckerberg, the investments in the metaverse will pay off in ten years. To conserve money in the meanwhile, he was compelled to cease hiring, cancel projects, and reassign people.
On the most recent earnings call in late October, Mark Zuckerberg stated, “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 the majority of other teams will stay flat or shrink over the next year, and we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”
In June, the social media company cut its plans to hire engineers by at least 30%, and Mark Zuckerberg warned employees to brace themselves for an economic slowdown.
Altimeter Capital Management, Meta’s stakeholder, had indicated in an open letter to Mark Zuckerberg that the company needs to streamline by cutting positions and capital expenditures. They also indicated that investors had lost faith in Meta Platforms as a result of its increasing spending and shift to the metaverse.
Several technical companies, including Microsoft Corp., Twitter Inc., and Snap Inc., have decreased personnel in recent months due to rising interest rates, rising prices, and a European energy crisis.
Meta Platforms, an American corporation, owns the social networking and social media website Facebook. The name of the social networking site, which was founded in 2004 by Mark Zuckerberg and fellow Harvard College students Eduardo Saverin, Andrew McCollum, Dustin Moskovitz, and Chris Hughes, is derived from the Face Book directories that are frequently distributed to students at American universities.
Initially limited primarily to Harvard students, membership has been expanded to include students from other North American colleges and, as of 2006, anybody over the age of 13. As of July 2022, Facebook had 2.93 billion monthly active users, making it the third most popular website in the world. That was the most popular smartphone app of 2010.
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