Meta will cut 10,000 more posts
This is a new shock for Meta. Mark Zuckerberg’s group formalized a new social plan on Tuesday – the second in just five months. This time, the parent company of Facebook, Instagram and WhatsApp will lay off 10,000 employees around the world. At the same time, 5,000 currently vacant job offers will be closed.
Counting the 11,000 people pushed out in November, 21,000 employees are therefore going or have already left Meta. Overall, Facebook’s payroll will therefore have decreased by a quarter in one semester, from some 86,500 employees at the end of 2022 to around 65,500 after departures – which will last until the end of 2023.
In detail, this new wave mainly affects human resources and international teams. But also and above all middle-level managers, the aim being to “flatten” the organization. Projects deemed less strategic should also be deleted, especially in connected objects called “wearables”, according to the “Wall Street Journal”. “It will be tough but we have no other choice. This means saying goodbye to talented and passionate colleagues who have been part of our success,” acknowledges Mark Zuckerberg in a blog post.
A historic drop in income
This wave of layoffs comes as Meta has been facing a difficult situation for months. The group is affected by a fall in its advertising revenues, the war in Ukraine, inflation and fears of recession having led advertisers to review their investments. A situation that has prompted many tech groups to lay off, from Amazon to Snapchat and Twitter.
But in the case of Facebook, there are also added Apple’s restrictions on ad targeting which largely prevent Meta from accumulating data on what its users do outside of its apps. Result, Facebook revenue fell 1% to $116 billion in 2022 – a first since its IPO in 2012. Its net profit had fallen by 41%.
But on this front, Meta does not expect any improvement. “This new economic reality will last for many years,” writes Mark Zuckerberg, who cites rising interest rates, geopolitical instability and increasing digital regulation. “In this context, we need to operate more efficiently […] to ensure our success.
Growth failure
More fundamentally, the oldest of the social networking giants (its creation dates back to 2004) is also facing a growth failure. Meta is suffering the brunt of competition from TikTok, the application of short and viral videos from Chinese ByteDance. In this context, Mark Zuckberg has tried a new start, pivoting towards the metaverse, this immersive “new Internet” project. To better embody this shift, the ex-Facebook has renamed itself Meta and promised to invest 10 billion dollars a year in the metaverse.
But the project did not convince either internally, nor investors. Virtual reality headsets to access the metaverse are still too expensive to hope for adoption by the general public. And the industrial uses of the metaverse have not really emerged yet. What penalize Meta on the stock market. In 2022, the group lost … 600 billion dollars in valuation. Since the November social plan, the Meta share has however doubled, in particular thanks to major share buyback plans (an additional 40 billion have been dedicated for this purpose).
Caught in this vice, Mark Zuckerberg placed 2023 under the sign of “efficiency”. The goal is to generate savings to become a “stronger and more agile” organization in the words of Mark Zuckerberg. Reducing the size of offices, stopping several data center projects, eliminating redundant workstations: the cuts are clear and clean. In 2022 alone, these restructurings cost Meta nearly $5 billion.
