Amid the economic downturn and the mass layoffs happening across all verticals, comes with news of Meta laying off around 11,000 of its employees yesterday.
Bad news on block
Meta CEO, Mark Zuckerberg announced the same via a letter to employees. This comes as a first in the 18 year old history of Meta. It seems that post the Musk laced actions at Twitter, the grey clouds have moved over to Meta.
Along with pink slips, Facebook now known as Meta, has also gone ahead with means such as hiring freeze, discretionary spending cuts for the first quarter. These were seen as bids to tackle the lowering revenues and rising costs.
Why the layoffs?
Before even such firings happened, Meta emitted signals for cost cuts, via shrinking of the real estate footprint as well as withdrawing some few employee perks, like free laundry and dinners for families. During Covid pandemic, most tech firms enjoyed a huge boom but this failed to sustain post pandemic.
Zuckerberg said in the letter, “At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration… I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.
As per the New York Times reports Meta disclosed its Reality Labs, a part of the main company handling Metaverse, had $3.67 billion oy in operating losses. It has also experienced its lowest revenues ever since its final quarter in 2020.