New Delhi: Facebook parent Meta is laying off 11,000 employees, or roughly 13% of its workforce, as it deals with declining income and broader digital sector challenges, according to CEO Mark Zuckerberg in a letter to employees sent out Wednesday.
The action was taken a week after Twitter’s new owner, billionaire Elon Musk, laid off a large number of employees.
Because more individuals stayed at home and read on their phones and laptops during the pandemic lockdown period, Meta, like other social media sites, benefited financially. However, as the lockdowns ended and people resumed venturing outside, the growth of revenue slowed.
The downturn in the economy and the unfavourable forecast for internet advertising, by far Meta’s largest source of income, have added to the company’s problems. This past summer, Meta recorded its first-ever quarterly sales decrease, which was followed by a larger decline in the following season.
While some of the suffering is special to the company, other parts are related to more general economic and technical causes. About half of Twitter’s 7,500 employees were let go last week as part of a chaotic reorganisation after Musk’s appointment as CEO. Although he did not disclose specifics regarding the losses, he tweeted that there had “no choice but to terminate the workers when the company is losing over $4M/day.”
By investing over $10 billion annually on the metaverse while shifting its attention away from social media, Meta has alarmed investors. According to CEO Mark Zuckerberg, cellphones will someday be superseded by the metaverse, an immersive digital realm.
The marketers on Meta are preparing for a possible downturn. Another issue is that Apple’s privacy tools make it harder for social media sites like Facebook, Instagram, and Snap to monitor users without their permission and serve them adverts.
TikTok’s competition is also becoming more and more of a concern as younger users prefer the video-sharing app to Instagram, which Meta also controls.