After Twitter, Meta will lay off thousands this week
Mark Zuckerberg has lost $100 billion and seen a 25% decline in the value of Meta shares in just 13 months. Due to these disappointing results and the looming threat of a recession, Meta has decided to lay off thousands of employees this week, following in the footsteps of Elon Musk, who laid off the same number of workers from Twitter on Friday.
Sources close to the company confirmed the above to the Wall Street Journal and said that Zuckerberg’s team will soon begin notifying those who would be laid off. A day after the US midterm elections, on November 9, the reductions are set to go into effect.
There are 87,000 people employed by Meta around the world, and it has been rumoured that the company may lay off several thousand of them. If true, it would be one of the largest single rounds of layoffs ever experienced by a technology company.
Meta’s stock has dropped by almost 70% since the beginning of the year, partly as a result of Zuckerberg’s risky bet to invest billions of dollars in a poorly received metaverse platform. Along with a stagnating user base, the company’s advertising revenue has fallen.
Meta will “focus our investments on a small number of high-priority growth areas,” according to a company representative.
That means certain teams will grow dramatically, while most others will stay the same or decline over the next year, Zuckerberg said during the company’s third-quarter earnings call last month.
Meta stockholders are frustrated by Zuckerberg’s gamble on the so-called Metaverse, as they believe billions of dollars are being spent on an endeavour with no chance of success.
Meta predicted in October that its Reality Labs business (responsible for creating the “metaverse”) would incur “substantially” higher losses in 2023, even as capital expenditures reached a record high of $39 billion.
Major shareholder Altimeter Capital Management has called for layoffs and budget cuts, claiming that spending on the metaverse “is frightening, even by Silicon Valley standards”
