The job cuts come just a week after widespread layoffs at Twitter under its new owner, billionaire Elon Musk. There have been many job cuts at other tech companies that have been hiring quickly during the pandemic. Zuckerberg also said he had made the decision to hire aggressively, anticipating rapid growth even after the pandemic ends. “Unfortunately, this didn’t turn out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to previous trends, but the macroeconomic downturn, increased competition and loss of signal from advertising have caused our revenue to be much lower than I expected. I was wrong and I take responsibility for it. “
The company’s stock has fallen
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown as more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going out again, revenue growth began to falter. An economic slowdown and a bleak outlook for online advertising — by far Meta’s biggest source of revenue — have contributed to Meta’s woes. This summer, Meta posted its first quarterly revenue decline in history, followed by another, larger decline in the fall. Some of the pain is company-specific, while some is tied to broader economic and technological forces. Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as Musk took the helm. He tweeted that he had no choice but to cut jobs “when the company is losing over $4 million/day,” though he did not elaborate on the losses. Meta has alarmed investors by pouring more than US$10 billion a year into the “metaverse” as it shifts its focus away from social media. Zuckerberg predicts that the metaverse, an immersive digital universe, 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 harder for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them.
Contest by TikTok
Competition from TikTok is also a growing threat as young people flock to the video-sharing app over Instagram, which is also owned by Meta. “We’ve cut costs across our business, including reducing budgets, reducing perks and shrinking our real estate footprint,” Zuckerberg said. “We are restructuring the teams to increase our efficiency. But these measures alone will not bring our expenses into line with our revenue growth, so I have also taken the difficult decision to let people go.” Zuckerberg told employees on Wednesday that they will receive an email letting them know if they are among those leaving. Access to most corporate systems will be cut off for people who lose their jobs, he said, because of the sensitive nature of that information. “We keep email addresses active throughout the day so everyone can say goodbye,” Zuckerberg said. Former employees will receive 16 weeks of base pay, plus two additional weeks for each year with the company, Zuckerberg said. Health insurance for these workers and their families will continue for six months.
title: “Facebook S Parent Company Meta Is Laying Off 11 000 People " ShowToc: true date: “2022-12-19” author: “Patricia Glisson”
Zuckerberg has been hiring aggressively in recent years, doubling the size of the company’s workforce from what it was before the COVID-19 pandemic. Most of those hires have gone into building the metaverse — an online universe of augmented reality that Zuckerberg says is the future of the company and society. The company has spent tens of billions of dollars trying to build the converted unit, known as Reality Labs, on the assumption that revenue would follow. But that hasn’t happened, and even worse, the company’s core business has begun to slow at the same time. “They’re hemorrhaging money because of their big bet on the metaverse,” said Daniel Tsai, a technology and business lecturer at the Metropolitan University of Toronto. Meta and its advertisers are preparing for a possible recession. There’s also the challenge of Apple’s privacy tools, which make it harder for social media platforms like Facebook, Instagram and Snap to track people without their consent and target ads to them. The company posted its first quarterly loss in its history as a public company last summer, and then another this fall. “Unfortunately, this didn’t turn out the way I expected,” Zuckerberg said in a prepared statement. “Not only has online commerce returned to previous trends, but the macroeconomic downturn, increased competition and loss of signal from advertising have caused our revenue to be much lower than I expected. I was wrong and I take responsibility for it. “
The impact in Canada is not yet known
Meta has an extensive presence in Canada, both at its Canadian headquarters in Toronto and through satellite offices across the country with remote employees. But it was not immediately clear how many Canadian employees have been laid off. CBC News contacted company representatives, who said they had no Canadian details to add. Earlier this year, Meta announced it had ambitious plans to hire up to 2,500 more people in Canada. On Wednesday, the company was evasive about whether any of those hires were affected by Wednesday’s news. “Our expansion into Canada has always been a long-term plan over several years. We remain committed to Canada and look forward to many years of innovation in Toronto,” the company said. WATCHES | Facebook is now Meta — but the same problems remain:
Facebook rebrands, reveals plan to focus on metaverse
In an effort to attract younger users and distance itself from the recent controversy, Facebook announced its new company name, Meta Platforms, and plans to create a virtual reality network known as the metaverse.
The company’s stock has fallen
Meta, like other social media companies, enjoyed a financial boost during the pandemic lockdown as more people stayed home and scrolled on their phones and computers. But as the lockdowns ended and people started going out again, revenue growth began to falter. Meta is just the latest major tech company to announce layoffs, but its business has suffered more than most. Meta’s share price is now trading where it was in 2016. Although the company is only a year into its turnaround push, Tsai of the Metropolitan University of Toronto is already using the word “bust” to describe the venture. “There is no demonstration that it will work,” he said in an interview. And the slowdown in the company’s core business, its social media platform, is eating into the runway it thought it needed to take off the metaverse, he said. “What we’re going to see next quarter is if Facebook continues to struggle, you’re going to have more layoffs and more cuts going forward.” Last week, Twitter laid off about half of its 7,500 employees, part of a chaotic overhaul as new owner Elon Musk took the helm. He said he had no choice but to cut the crowd in half “when the company is losing over $4 million/day.” In Canada earlier this year, Shopify laid off about 10 percent of its staff, while fintech startup Wealthsimple laid off about 13 percent of its workers.
Former employee ‘totally blind’
Meta needs to cut costs to stay nimble in the current economic environment, and layoffs are a quick way to do that. But that doesn’t make it any easier for those who lost their jobs. The director of engineering, Eric Triebe, was one of them. “I knew layoffs were coming for the last couple of days. We knew it was obviously a possibility,” the Seattle resident told CBC News on Wednesday. “But overall I didn’t expect it.” While Triebe said he understands that “companies grow a little too fast sometimes and you have to make cuts based on your profitability,” the way the news broke, via email, “completely blindsided him,” he said. “It’s a very difficult thing to do on this scale, but I think a lot more attention could have been paid to it,” he said. “It feels really bad.”
Contest by TikTok
Competition from TikTok is also a growing threat as young people flock to the video-sharing app instead of Instagram, which is also owned by Meta. “We’ve cut costs across our business, including reducing budgets, reducing perks and shrinking our real estate footprint,” Zuckerberg said. “We are restructuring the teams to increase our efficiency. But these measures alone will not bring our expenses into line with our revenue growth, so I have also taken the difficult decision to let people go.” Former employees will receive 16 weeks of base pay, plus two additional weeks for each year with the company, Zuckerberg said. Health insurance for these workers and their families will continue for six months.
