After many years of continuous growth, here is Meta (formerly Facebook) is experiencing an unprecedented downturn. Job cuts are followed by other cuts, including “budget cuts, shrinking benefits and shrinking our real estate footprint,” CEO statement says mark zuckerberg. But how to explain such a situation?
The CEO of Meta tried to explain:
These measures will add up to a significant cultural change in the way we operate. We are also taking a number of additional steps to become a leaner, more efficient business by reducing discretionary spending and extending our hiring freeze through the first quarter.
For your information, the graph below shows the number of Meta since 2017, when the company began communicating publicly about it. Starting from a workforce of 18,770 people in 2017, the company has grown to 87,314 people, and it is preparing to withdraw 11,000, or 13% of the total workforce.
However, we should not fall into the Meta Bashingbecause many other companies, Amazon, Microsoft and Apple in the lead have recently decided to freeze hiring and cut spending. Metahowever, is much more impacted that these last, because it has considerably increased its capital expenditure over the past few years, expenses that it will have to, as you will have understood, greatly reduce. The CEO of Meta partly explains this drastic measure:
At the onset of Covid, the world quickly turned to the internet and the rise of e-commerce led to outsized revenue growth. Many people predicted that it would be a permanent acceleration that would continue even after the pandemic was over. I did the same, and so I made the decision to significantly increase our investments. Unfortunately, things didn’t go as I planned.
Not only has e-commerce returned to earlier trends, but the macroeconomic downturn, increased competition, and loss of advertising signal has caused our revenue to be much lower than I had anticipated. I was wrong, and I take responsibility for it.
Despite its detractors, Zuckerberg Sticking to it, he maintains (still?) that his “long-term vision for the metaverse” remains a “high priority growth” area for the company.
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