Meta Downturn Worsens, Zuckerberg to Announce Thousands of Job Cuts - Report

By Jacob J
November 7, 2022 10:29 +08

Musk begins laying off Twitter employees; shuts offices temporarily

Mark Zuckerberg's Meta Platforms is set to lay off thousands of employees, reports have said, underscoring the troubles the Facebook parent has been going through of late.

The Wall Street Journal reported on Sunday that an announcement on the job cuts could be made as early as Wednesday.

Grim Outlook

In October, Meta's grim quarterly outlook had wiped nearly $67 billion off Meta's stock market value. Meta's trouble range from slowing global economic outlook, rising competition from TikTok and a worsening battle with Apple on privacy settings. Besides analysts assess that Zuckerberg's huge metaverse gamble has been a drain on the company.

"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 in October.

In late September, Zuckerberg said that Meta was freezing hiring across the board and that layoffs would happen in the future. "Our plan is to steadily reduce headcount growth over the next year. Many teams are going to shrink so we can shift energy to other areas," Zuckerberg said during an internal conference call with the employees.

Shareholder Pressure

Altimeter Capital Management, which holds significant shareholding in Meta, had warned earlier that the company needs to cut jobs and streamline operations to remain competitive.

Mark Zuckerberg and other business leaders oppose Trumps order to end DACA

Zuckerberg had warned that Meta, which also owns social media giant Instagram, was facing one of the worst downturns in its history and that job losses are certain in the near future.

Meta's long-drawn privacy battles with Apple has also been a headache for Zuckerberg. Last week Apple stipulated that iOS developers have to give Apple a 30 percent cut on the sales they receive using the 'boosts' option for posts on social media apps. This will directly hit Facebook and Instagram as these apps allow people make payments to boost the reach of their posts.

Tech Companies Trimming Jobs

With economic gloom catching up, several companies, especially, tech organizations, have either announced job cuts or frozen hiring.

Many Big Tech companies like LinkedIn, Meta, Oracle, Twitter, Nvidia, Snap, Uber, Spotify, Intel and Salesforce have either laid off employees or frozen hiring amid the global economic downturn.

Google executives have reportedly warned workers to either boost performance or prepare to leave. An internal message circulated among the employees warned that "there will be blood on the streets" if the next quarterly earnings are not good.

Shockingly, tech giant Apple laid off recruiters after warning earlier that an economic downturn was forcing a hiring freeze. Bloomberg News reported that as many as 100 contract workers have been fired, indicating the spending squeeze at the iPhone maker.

The development came two weeks after Apple reported record revenues in the quarter ended June 30.

In July, Microsoft laid off hundreds of employees ahead of its quarterly earnings and amid growing economic uncertainty. The move, the company said, was in a bid to "realign" groups and roles after the close of its fiscal year on June 30, even as the company intends to grow its headcount in the coming months.

Tesla said in June it was planning to axe 10 percent of staff, along with freezing hiring amid stalled Twitter deal, global macroeconomic conditions like chip shortage, rising inflation and high interest rates. Elon Musk had emailed Tesla executives, telling them the electric car-maker needs to pause hiring worldwide and cut its workforce by about 10 percent.

In early July, Meta boss Mark Zuckerberg warned employees that the company was facing one of the worst downturns in its history and that job losses are certain in the near future. The CEO of the tech giant that owns social media companies Facebook and Instagram said in uncertain terms there will be a scaling back of operations and employee departures owing to the tight financial squeeze the behemoth is facing.

Chinese tech giant Tencent said last week it sacked a whopping 5,500 employees after the June quarter revenue dipped 3 percent, which was the company's first quarterly revenue slip after listing.

Earlier in March, Reuters had reported that Alibaba Group and Tencent Holdings were preparing to cut tens of thousands of jobs combined this year.

Smartphone giant Xiaomi said last week it has cut more than 900 jobs as the Chinese economy is witnessing a slowdown. The smartphone giant had revealed that its revenues fell 20 percent in the June quarter. The layoffs affected nearly 3 per cent of Xiaomi's workforce, according to the South China Morning Post.