1. Meta Starts Week with Mega Layoffs and Dark Clouds for Tech
- Facebook’s parent company, Meta, is reportedly preparing to begin layoffs this week that will affect thousands of the company’s 87,000 employees globally.
- Meta’s cuts will add to already mounting job losses in Silicon Valley.
It’s not just the Crypto Winter which has set in, but the Tech Winter as well.
Facebook’s parent company, Meta, is reportedly preparing to begin layoffs this week that will affect thousands of the company’s 87,000 employees globally.
The job cuts come after US$80 billion was wiped off Meta’s market value last month amid a global economic slowdown.
Last month, Meta CEO Mark Zuckerberg said,
“In 2023, we’re going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year.”
Meta is not alone in the layoffs and downsizing.
U.S. tech companies have been hit particularly hard by rising interest rates, which make them less attractive compared with other stocks with lower price-to-earnings ratios, and a soaring dollar, which has hit overseas revenues.
Meta has been struggling with growing losses as it invests heavily in developing its metaverse business, even as user and ad revenue growth in its core businesses declines.
Meta reported that its metaverse division, Reality Labs, made a US$3.7 billion loss over the past three months and said these losses would “grow significantly year over year” in 2023.
Amid a tightening ad market, Meta has also said it expects to lose US$10 billion in ad revenue in 2022 as a result of privacy changes by Apple which allow its users to opt out of the company being able to track users across apps.
Meta’s cuts will add to already mounting job losses in Silicon Valley.
Twitter slashed nearly half of its workforce following the takeover of the company by billionaire Elon Musk which is rationalizing the company’s operations.
Other companies, such as ridehailing firm Lyft, payment company Strike and hard drive maker Seagate Technology, have also reduced their workforce or announced plans to trim jobs.