Meta: Second round of layoffs will affect 10,000 jobs worldwide
On Tuesday, Meta Platforms, parent company of Facebook, announced that it will cut 10,000 jobs this year, its second wave of mass layoffs, as the sector prepares for a deep business recession.
The job cuts were largely anticipated, and are part and parcel of a reorganisation that will see Meta drop plans to hire 5,000 new employees, as well as slash low-priority projects.
Meta’s share price posted a 6.1% increase as of 3.41 p.m. GMT on Tuesday, while the NASDAQ Composite index was up 2.5% at the same time.
Last November, Meta cut more than 11,000 jobs, equivalent to 13% of its workforce. In 2020, the group had doubled the number of employees.
In a message to staff, CEO Mark Zuckerberg said most of the cuts will be announced in April and May, but that in some cases there would continue to be cuts until the end of the year.
“For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. But last year was a humbling wake-up call,” Zuckerberg wrote. “I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” he added.
This decision is likely to allay investor fears, after revenue growth in Meta’s core businesses slowed down due to high inflation and a slump in digital advertising, following the e-tail boom during the Covid-19 pandemic.
Concerns about the economic slowdown linked to rising interest rates have also triggered a series of massive job cuts in other US companies: from Wall Street banks such as Goldman Sachs and Morgan Stanley, to major tech groups like Amazon and Microsoft.
Since the start of 2022, the digital tech industry has laid off nearly 290,000 people, about 40% of them this year, according to redundancy-tracking website layoffs.fyi.
In addition, Meta’s platforms have stopped investing in digital collectibles, the famous non-fungible tokens (NFTs), less than a year after deploying a number of NFT solutions. While the cryptocurrency market continues to plummet.
“We’re winding down digital collectibles (NFTs) for now, to focus on other ways to support creators, people, and businesses,” tweeted Stéphane Kasriel, Meta's head of commerce and financial technologies, on Monday.
Last year, the company allowed creators to share NFTs on Instagram and Facebook, while, driven by billions of dollars’ worth of sales for cartoon character replicas, the popularity of crypto assets exploded.
But Bitcoin and other currencies took a severe hit in late 2022, after the sudden bankruptcy of cryptocurrency exchange FTX. A downturn that was compounded by the collapse last week of three US banks, two of which were heavily involved in cryptocurrency trading.
“We’ll continue investing in fintech tools that people and businesses will need for the future. We’re streamlining payments [with] Meta Pay, making checkout & payouts easier, and investing in messaging payments across Meta,” further tweeted Kasriel.
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