This would be the first social plan in its history. Meta (Facebook, Instagram) plans to fire thousands of people starting this week, according to The Wall Street Journal (WSJ), while several technology companies have just laid off part of their workforce in response to the economic crisis.
According to the American daily, this may be the most comprehensive social plan in the sector after the pandemic, which has greatly benefited the growth of revenues, but also for the staff of these companies. Meta had around 87,000 employees worldwide as of 30th of September.
During the recent publication of the latest disappointing quarterly results, boss Mark Zuckerberg mentioned that the group’s staff should not increase before the end of 2023, or even decrease slightly. According to WSJ sources, the social plan was to be announced on Wednesday, and several thousand employees will be affected by this first social plan in the history of the social networking giant.
Last Thursday, two Silicon Valley companies, Stripe and Lyft, announced sweeping layoffs as Amazon froze hiring at its offices. Twitter, recently acquired by Elon Musk, has just laid off about half of its 7,500 employees.
Platforms whose economic model is based on advertising are particularly suffering from budget cuts from advertisers struggling with inflation and rising interest rates.
Meta saw its net profit melt to $4.4 billion in the third quarter (-52% year-over-year). “We face an unstable macroeconomic environment, increased competition, ad targeting issues and rising costs for our long-term investments, but I have to say that our products seem to be doing better than some reviews suggest.”tried to temper Mark Zuckerberg in late October during the analyst conference.
But the title of the Californian group fell 24.56% the next day on Wall Street. In one year, Meta lost nearly $600 billion in market capitalization. The company has worried the markets since the start of the year, when it first announced that it had lost users on its original social network, Facebook.
The costly investments to build the metaverse, presented as the future of the Internet, do not reassure investors who doubt the group’s ability to generate significant income from this fledgling parallel universe.