What had to happen happened… Meta has just formalized the first major wave of layoffs in its history. Thousands of employees will be impacted in the coming days.
A difficult decision for which Mark Zuckerberg takes full responsibility. It must be said that the boss of Facebook has not really had a hollow nose about his latest investments to date.
Layoffs that do not leave indifferent
Earlier in the week, the famous wall street journal already mentioned massive layoffs about to take place at Meta. It must be said that the American company recently recorded catastrophic results with 10 billion dollars in losses for the year 2021 alone. The company expects even greater losses in 2023. A tense context which will have heavy repercussions.
Thus, Meta will part with more than 11,000 employees, which represents approximately 13% of its entire workforce. Laid-off employees will receive an email notifying them of their departure. For employees based in the United States, compensation and support will be put in place. For example, they will receive compensation (based on their salary) worth 16 weeks with two additional weeks per year of seniority. Health costs will be covered for six months and Meta will help people find new jobs.
The company also plans to extend its hiring freeze until the first quarter of 2023. Discretionary spending will be reduced.
A losing strategy!
This wave of layoffs sounds like the sad end to a long series of investments that have not been fruitful. Indeed, the pandemic had allowed Meta to sharply increase its revenue since consumers were mostly stuck at home. The demand being important, Zuckerberg did not hesitate to hire with a vengeance and then to invest in several sectors such as the metaverse.
While some analysts saw this acceleration in demand for online services and other products remaining permanent after the pandemic, the reality was quite different. The trend eventually returned to pre-pandemic levels, leading to steep declines in Meta revenue. Not to mention the fact that the metaverse according to Facebook is struggling to convince.
Zuckerberg therefore wants to focus on the priority growth areas of his company (advertising, commercial platforms, etc.). The CEO had already explained that Meta would be a smaller organization in 2023 »… And we now understand what he meant by that!
Source : Engadget
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