Facebook parent company Meta is laying off 11,000 people around the world. This follows another major social media company Twitter doing the same last week. Nine percent of Twitter’s workforce was eliminated last week.
In an internal statement, Facebook CEO Mark Zuckerberg said that the company will be cutting its non-compulsory expenses. And the company is delaying new hiring till 2023.
Meta confronts a variety of challenges in the company’s core operations. It also comes amid recent layoffs at other tech firms. The business sector is responding to increasing inflation, rising interest rates, and unexpected recession.
Reality Labs Hiring
During the pandemic outbreak, Zuckerberg has been hiring more workers in order to help scale Meta services. While augmented reality is still restricted to a relatively small audience, it is becoming easier to create and distribute. In the future, it is likely that the metaverse will be prevalent in society.
Metaverse virtual reality unit, Reality Labs, encounter some recent difficulties. After spending tens of billions of dollars, they have never had the revenue they hoped for. This unexpected disappointment has forced their core business to start slowing down.
Zuckerberg predicted that online commerce would rise, but it is actually trending back to below as happened before. Fewer advertisers and increased competition combined with a decline in ad revenue. It has caused revenue to be lower than anticipated. Zuckerberg got this wrong. He concedes due to responsibility for these errors.
Metaverse is Under the Risk
The company changed its name to meta from Facebook focusing on digital infrastructure and the worlds it will bring with it. It may be early, but investors do not appreciate this new strategy. While the stock price has held up, the increased costs and expenses are a concern among analysts.
San Francisco and Austin Office Shut Down
Sources say Meta is expected to be completing the elimination to end the main office at 181 Fremont St. In 2023. This third of the Salesforce Tower is over 432,000 square feet and will be used on a full-time basis. Sources close to the matter say that Meta has been talking with them over the last week.
The office closure in Austin encompasses 500,000 square feet of office space. It is about half the size of Half of Salesforce Tower. The New York lease ends and Inc. magazine has reported that Meta is not renewing. Inc. website reports that San Francisco meta offices are being consolidated into a 750,000-square-foot space at 250 Howard Street.
Refocus on value-providing
According to some sources, recent layoffs at Facebook have been motivated by Zuckerberg’s criticism of his own management decisions.
Zuckerberg stated that hiring underestimates the company today, but he believes that services would still grow as rapidly. Billions of people would eventually use Meta service to connect to each other. Those services grow consistently.
Zuckerberg suggests that Meta is one of the purpose-oriented companies in the world with huge potential for growth. Plus, we are at the forefront of developing cutting-edge technologies such as social connections and computing devices.
Meta Stock Crash In 2022
It is been a tough year for tech companies as many of them have experienced significant value drops. This trend also impacted Meta shares, which lost 72 percent of their value though the company never take sole responsibility. That is because Microsoft and Amazon both reduced hiring this month and Twitter eliminate half its workforce last week.
When a company does a restructuring, there are measures to make it as easy for affected employers. Not that impacts laid-off employers, but also those who remain and the company’s reputation. To ensure that it happens smoothly and with tact, the company must follow certain protocols (procedures) along with empathy.