Social media giant Facebook’s mother company Meta reportedly will send its 100, 000 employees in the chopping board as the company in a bid to slash its losses due to advertisement company’s cross cutting on expenditures.
Facebook owner Mark Zuckerberg said on Wednesday that the decision to sacks 11,000 of its staffs in “the most difficult changes we’ve made in Meta’s history”, adding that the job cuts represents 13% of the social media titan’s workforce and would affect its research lab focusing on the metaverse as well as its apps, which include Facebook, Instagram and Whatsapp.
The mass job cuts come at the heels of the announcement of new Twitter owner Elon Musk of mass layoffs.
“I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted” Zuckerberg said in a note to staff.
Just like Facebook, another ad-supported social platform Google is also suffering with advertisers looking to cut costs as they struggle with inflation and rising interest rates.
Zuckerberg had expected the boost in e-commerce and online activity during the Covid pandemic to continue, but he got this wrong and took the responsibility for that.
The reported downturn has also affected companies across the tech sector, with Apple and Amazon also recently announced results that disappointed their respective investors.
Problems unique to Meta:
There have been reports that Investors have been worried about Zuckerberg’s decision to allot billions of dollars to developing the so-called metaverse, an immersive version of the web accessed via virtual reality headsets.
Last year, Zuckerberg renamed the company to Meta ostensibly to reflect the commitment to the project, but the division working in his ambitious metaverse technology has reportedly made losses of more than $3.5 billion.
Early this year, the Meta owner already hinted several times that belt-tightening measures were just around the corner. In his letter on Wednesday that staff layoffs were a “last resort”.
Aside from job purging, Zuckerberg also said that Meta would also keep a hiring freeze going into next year and other spending cuts were envisaged.
Another part of Zuckerbergs’ letter says that “Fundamentally, we’re making all these changes for two reasons: our revenue outlook is lower than we expected at the beginning of this year, and we want to make sure we’re operating efficiently.
Meta last month announced profits of $4.4 billion in the third quarter, a 52% decrease year-on-year, causing its stock price to plunge 25%.