According to people familiar with the situation quoted in the Wall Street Journal on Sunday, Meta Platforms Inc. plans to make a statement as early as Wednesday and will start large-scale layoffs this week that would affect thousands of employees. The WSJ report was not addressed by Meta. On top of the more than half a trillion dollars in value already lost this year, Facebook parent Meta predicted in October a bad Christmas quarter and much higher costs in the next year, knocking nearly $67 billion off Meta’s stock market worth.
The discouraging news comes as Meta battles a sluggish global economy, TikTok rivalry, Apple privacy reforms, worries about big spending on the metaverse, and the looming danger of regulation. Mark Zuckerberg, the CEO, has stated that he anticipates it will take around ten years for the investments in the metaverse to pay off. In the meanwhile, in order to save expenses, he had to halt hiring, cancel projects, and rearrange teams.
‘We’ll concentrate our efforts on a select few, high-priority development sectors in 2023. That indicates that although most other teams will remain stagnant or contract during the upcoming year, certain teams will see considerable growth. Overall, we anticipate being either around the same size or even a little bit smaller company by 2023 than we are now’, Mark Zuckerberg said on the last earnings call in late October.
With Mark Zuckerberg advising staff to prepare for a slowdown in the economy, the social media firm dropped plans to hire engineers by at least 30% in June. In a previous open letter to Mark Zuckerberg, Meta’s shareholder Altimeter Capital Management stated that the company needed to streamline by reducing capital expenditure and employee salaries. The letter also stated that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse.
As the pace of global economic development slows as a result of increased interest rates, increasing inflation, and an energy crisis in Europe, several technological companies, including Microsoft Corp, Twitter Inc, and Snap Inc, have reduced recruiting and reduced job openings.