With plans to layoff thousands of employees this week, Facebook parent company Meta will join a growing list of digital companies that are reducing their workforces.
As of September 30, Meta has over 87,000 people working for it across its various platforms, which include the social media sites Facebook and Instagram as well as the messaging service WhatsApp. According to WSJ, the social media business had reduced its ambitions to hire engineers by at least 30 per cent in June, and Mark Zuckerberg had advised staff to prepare for a slowdown in the economy.
In his announcement of Meta’s dismal third-quarter results, CEO Mark Zuckerberg stated that the company’s headcount will not rise by the end of 2023 and might even decline significantly.
“In 2023, we’re going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today,” Zuckerberg said on the last earnings call in late October.
Profits for Meta dropped to $4.4 billion in the third quarter, a 52 percent year-over-year decline. The poor findings had a significant negative impact on Meta’s stock price, which dropped by 25 per cent in one day.
Over the past year, the company’s market value has decreased to $600 billion.
In a previous open letter to Mark Zuckerberg, Meta’s shareholder Altimeter Capital Management stated that the company needed to streamline by eliminating positions and capital expenditures. They also stated that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse.
Owing to increased interest rates, rising inflation, and a European energy crisis, several technological businesses, including Microsoft Corp., Twitter Inc., and Snap Inc., have reduced workforce in recent months.
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