Thousands of employees at Facebook, Instagram and Whatsapp are expected to lose their jobs amid the economic crunch. The news comes as other tech giants also make cuts.
Meta Platforms Inc is reportedly preparing to lay off thousands of employees as the social media giant reels from a poor financial outlook for the coming year.
The measures could be announced as early as Wednesday, the US newspaper the Wall Street Journal reported on Sunday.
Meta CEO Mark Zuckerberg already said in October that the company’s staff of around 87,000 may shrink by the end of 2023.
Why is Meta firing thousands of employees?
The tech giant has had a difficult year having lost half a trillion dollars in value by market capitalization. In October the company announced a 52% year-on-year drop in third quarter profits and disappointing forecasts for the holiday quarter as well as further costs in 2023.
This led to Meta’s stock value plummeting by around $67 billion (€67.4 billion), losing around a quarter of its stock market price in one day.
The company’s woes come as advertisers slim down their budgets amid rising inflation.
The belt-tightening has also raised questions about Zuckerberg’s new high-cost project the Metaverse which he has said will only pay off around 10 years down the line.
Tech industry in trouble
Meta is not the online platform company scaling back its workforce as a means of dealing with a troubling economic situation.
Other Silicon Valley firms such as Stripe and Lyft announced mass layoffs last week, while online retail giant Amazon said it would put corporate hiring on ice.
Facebook’s social media rival Twitter also recently laid off around half of its 7,500-strong staff, soon after billionaire Elon Musk finally completed his purchase of the company.
Musk — who said that the platform was losing over $4 million a day to justify the decision — is now facing lawsuits over the abrupt mass firings. Musk also blamed activist groups for pressurizing advertisers to halt spending on Twitter amid concerns about its content moderation under the self-styled free speech absolutist.
Confusion over the company’s future under the new boss was further compounded on Sunday, US media reported, as dozens of fired Twitter employees were asked to return, with some reportedly having been fired by mistake, and others having been fired before the new management realized how vital their roles were.
ab/msh (AFP, Reuters)