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Meta, Facebook’s parent company, plans to initiate its first significant layoffs amid the fragile economic conditions.
According to the Wall Street Journal, the firm’s decision comes as it grapples with a declining business and growing fears of a recession.
The news
The major layoff is expected to impact thousands of people.
According to the Journal, the layoffs could begin as early as this week, citing anonymous people familiar with the case.
A September SEC filing also reveals that Meta has more than 87,000 employees.
Read also: Meta complies with UK’s breakup order, sells Giphy
Earnings result
In October, Meta held a conference call to discuss the third-quarter results.
CEO Mark Zuckerberg said he expects the company to end 2023 at the same size or with a smaller organization than it is today.
Revenue
While it’s not sure yet, the potential cuts could be attributed to tighter budgets for advertisers.
Additionally, Apple’s iOS privacy changes have weighed on the company’s core businesses.
Last month, Meta reported a decline in sales in the second quarter, reporting that profits had halved from the previous year.
The drop in profits is caused by the billions the company spent to build the metaverse.
The metaverse is what many hints to be the future of the Internet; however, it is probably years away from perfection.
The social media giant boasted a market cap of over $1 trillion in 2021, but the market cap has dropped since then.
Today, Meta is worth over $250 billion.
When news of job cuts surfaced, the company’s stocks opened more than 5% higher on Monday morning.
Read also: Meta witness stocks fall by 17% in September
Other companies
Meta isn’t the only tech company to rethink its workforce.
Once considered an untouchable industry, many tech companies have announced staff freezes or job losses in recent months.
The decision comes as a surprise, as many witnessed rapid growth during the pandemic.
Last week, Lyft announced it would lay off 13% of its employees.
Payment processor Stripe also said it was cutting 14% of its staff.
In addition, the e-commerce giant Amazon announced that it was suspending the hiring of corporate positions.
Twitter, Facebook’s rival, made significant cuts on Friday after Elon Musk bought the social media company.
The cuts have impacted Twitter’s artificial intelligence, marketing and communications, research, and public policy team, to name just a few of the departments affected.
According to Bloomberg, since the takeover of Musk, Twitter has asked dozens of fired employees to return.
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