Meta Platforms Inc plans to begin mass layoffs this week affecting thousands of employees, the Wall Street Journal reported on Sunday.
The disappointing forecast comes as Meta struggles with the declining global economy, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation, Reuters reported.
According to chief executive Mark Zuckerberg, it will take around ten years for the investments in the metaverse to bear fruit. To cut costs in the interim, he had to halt employment, cancel projects, and rearrange personnel.
“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. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today” Zuckerberg was quoted as saying by Reuters.
In October, Meta, the parent company of Facebook, predicted a weak holiday quarter and much higher costs in 2019, which will reduce Meta’s stock market value by around $67 billion and add to the more than half a trillion dollars in value already lost this year.
Facebook parent Meta had reduced its plans to hire engineers by at least 30 per cent in June, with Mark Zuckerberg warning employees to prepare for a slowdown in the economy.
Meta’s shareholder Altimeter Capital Management in an open letter to Mark Zuckerberg stated that the company needed to streamline by cutting jobs and capital expenditures. They also stated that investors had lost faith in Meta as a result of its increased spending and pivot to the metaverse, a Reuters report further added.
With inputs from agencies
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