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Facebook’s parent company Meta is laying off 11,000 employees, or about 13% of its workforce, as it deals with declining revenue and the problems of the broader technology industry, CEO Mark Zuckerberg said in a letter sent to employees Wednesday.
The layoffs come just one week after the new owner of Twitter, billionaire Elon Musk, laid off a large number of employees. Many of the job cuts have occurred at other tech companies that hired quickly during the pandemic.
Why does this happen?
“Unfortunately, it didn’t turn out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce reverted to previous trends, but the overall economic downturn, increased competition and ad signal loss caused our revenue to be much lower than I expected. I got this wrong, and I take responsibility for it.”
Zuckerberg also mentioned that he made the hiring decision aggressively, predicting rapid growth even after the pandemic is over.
distance Increased success as the world moved inward during the pandemicThe tech industry has experienced a sharp slowdown in recent months.
report from Watchman make it clear Global economic downturn, rising interest rates, and regulatory challenges Tech companies such as Alphabet and Amazon have urged to reduce or eliminate hiring. Snap laid off 1,300 employees and cut its investments in late August.
according to Axios ReportIn October, Microsoft laid off about 1,000 employees across several departments. After Elon Musk’s $44 billion acquisition of Twitter, the company laid off half of its workforce last week.
Facebook loses young users, Apple’s privacy policies
In recent months, Meta has faced uncertainty about the company’s future as its main Facebook platform loses young users and faces revenue challenges due to changes in Apple’s privacy policies. Meanwhile, investors appear unconvinced about the company’s metaverse pivot, the report said.
Meta has alarmed investors by pumping more than $10 billion annually into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts that the metaverse, an immersive digital world, will eventually replace smartphones as the primary way people use technology.
Meta and its advertisers are preparing for a possible recession. There’s also the challenge of Apple’s privacy tools, which make it more difficult for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Competition from TikTok is also a growing threat as young people flock to the Instagram video-sharing app, which is also owned by Meta.
What about Indian workers now?
IANS report mentions how the worst layoffs happened India Also difference, albeit marginally, citing reliable sources.
In one of the worst-ever layoffs in the tech industry after Twitter — which saw 90 percent of India’s team sacked — Mark Zuckerberg, founder and CEO of Meta, fired about 13 percent of the global workforce and freezes hiring until the first quarter of 2023.
Sources told IANS that the layoffs affected the Meta India team across sectors, although the exact number of employees affected could not be certain. The Indian Meta unit did not immediately comment on the IANS inquiry.
Meta likely has as many as 400 employees in the country, and its business is doing relatively well.
According to business intelligence platform Tofler, net profit of Facebook India Online Services, Meta’s registered entity, jumped to Rs 297 crore in FY 22 compared to Rs 128 crore in FY 21, while its revenue grew 56 per cent to Rs 2,324 crore in FY21. FY 22 of Rs 1,485 crore in FY 21.
Last week, Meta announced that its India president, Ajit Mohan, had decided to step down from his position at the company to pursue another opportunity. Mohan has acquired the Indian operations of Snap, the parent company of Snapchat, which is growing exponentially in the country especially among the youth.
Meanwhile, Zuckerberg said that as a termination measure, the company will pay 16 weeks of base salary, plus an additional two weeks for each year of service, “without a cap.” “Outside the US, support will be similar, and we will soon follow up with separate measures that take into account local employment laws,” he added.
series of landing
Investors cut the company’s market value by $80 billion (£69 billion) last month after it reported earnings halved during the third quarter. It was one of the most dramatic currency devaluations seen on Wall Street since the beginning of the year.
Meta’s third-quarter earnings were the latest in a string of poor results. It lost $230 billion in market value in February, the largest one-day loss in US corporate history.
Meta had hinted at job cuts after announcing a hiring freeze and potential restructuring in September.
“I would have liked the economy to stabilize more clearly now, but from what we’re seeing it doesn’t seem to have happened yet, so we want to plan fairly conservatively,” Zuckerberg told employees during a question-and-answer session last month.
The direction of Dismal Tech
As the big tech companies have reported less than stellar earnings in recent weeks, they have also given warning signals about the coming months, Business I mentioned from the inside. Customers have been cutting spending due to the looming threat of a recession, with few signs of a recovery in sight.
This means that in the coming weeks and months, these companies will be looking for ways to cut costs where possible, Dan Wang, associate professor at Columbia Business School, told Business Insider.
“When they cut costs, usually the first thing to do is labor costs as well as advertising and marketing. So when it comes to predicting what their numbers are going to look like, it will depend on how they see the trend in ad spend on their platforms. When that doesn’t look good, they have to absorb These forecasts by adjusting the workforce,” he told Insider.
Murphy explained that it always happened in cycles like this that companies sometimes didn’t lay off workers big enough, but rather slowed down on hiring and hoped that natural disruption would correct them.
“Coming out of the third quarter, which was a lot tougher than the second, it became clear how many headwinds were, and startups realized they couldn’t get out of this with the employees they had and they really had to lay off employees,” he was quoted as saying.
This report was initially published on November 9, 2022
With input from IANS
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