Meta, Facebook's parent company, plans to reduce its global workforce this week.
Meta appears to be following in the footsteps of other tech giants Twitter and Google, announcing a 30-50% reduction in workforce.
Until September, Meta had around 87,000 employees.
After Twitter's new Boss, Elon Musk, laid off roughly 3,700 employees last week, Mark Zuckerberg's Meta is all set to follow similarly, with employees expected to be notified as soon as Wednesday (Nov 9).
During the pandemic and subsequent lockdowns, social media and tech titans experienced unprecedented growth. In 2020 and 2021, Meta added almost 27,000 new employees. Now that some sort of normalcy has returned they're seeing a contraction.
According to a November 6 Wall Street Journal (WSJ) report citing persons familiar with the situation, the proposed layoffs could affect thousands of employees across Meta's 87,000-strong workforce.
Massive Layoffs because of Meta’s Q3 Losses?
This year, Meta shares have dropped by more than 73%. Furthermore, a 52% decline in net profits from $9.2 billion to $4.4 billion worried its stockholders. The metaverse division reported a $3.7 billion operational loss for the quarter. Following the company's recent earnings release on October 26, share values plunged by more than 30%.
The decline in the metaverse and NFT users during the bear market has also impacted Meta's virtual world Horizon Worlds. Zuckerberg, on the other hand, remains upbeat about the metaverse.
During the company's Q3 2022 earnings conference call, Meta CEO Mark Zuckerberg stated that most teams will "remain stable or shrink over the following year." Meta intends to emphasize its efforts in three areas: the AI discovery engine, ads corporate messaging platforms, and the "metaverse." The company plans to continue to invest extensively in these areas.
However, the company looks to be actively hiring into its metaverse section. As per the website’s job listing section, currently, 38 of its 413 listings are related to augmented reality and virtual reality.
Growing concerns over metaverse
The metaverse is drawing not only meta, but also large technology giants such as Google, Microsoft, and Nvidia to make the virtual world a reality, and the applications have endless economic and social potential for both good and bad. As firms develop their business plans for the metaverse, trust & safety issues must need to be prioritized.
Long-term perhaps. But today, revenues from metaverse adaptations primarily directed at consumers are gloomy. As per reports, blockchain-based worlds like Decentraland and Sandbox, which are popular among metaverse fans, continue to have a yearly negative return on investment (21.92% and 6.71%, respectively).
Although, Meta's pre-Microsoft Horizon Worlds appears to be performing a little better in terms of user participation. As per internal records obtained by the Wall Street Journal, it currently has approximately 200,000 monthly active users, down from the 300,000 claimed by the company in February. However, if the company proceeds with its large-scale layoff plan, it might affect its metaverse initiatives in the times to come.
What do you think about Meta’s plan for large-scale layoffs? Will it affect its metaverse operations? Share your views in the comment box below.
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