Facebook planning ‘large scale layoffs’ following hiring freeze and share price collapse

Facebook plans to begin large-scale layoffs this week that will affect thousands of employees, with an announcement already scheduled for Wednesday.

Facebook parent company Meta Platforms Inc forecast a weak holiday quarter and significantly more costs next year, wiping out about $67 billion of Meta’s stock market value, adding to the more than half a trillion dollars in value already lost this year. has been lost.

The disappointing outlook comes as Meta faces slowing global economic growth, competition from TikTok, privacy changes from Apple, worries about massive spending on the metaverse, and the ever-present threat of regulation.

The impending layoffs were first reported in the Wall Street Journal.

Chief Executive Mark Zuckerberg has said he expects the metaverse investments to take about a decade to pay off.

In the meantime, he’s had to stop hiring, close projects and reorganize teams to cut costs.

The Meta share price has continued to fall since the beginning of 2022, dropping 73 percent

Meta Platforms Inc. has been ranked as the worst-performing on the S&P500 as stocks continue to fall on concerns over the development of its precious virtual world – the Metaverse

Meta shareholder Altimeter Capital Management urged Mark Zuckerberg to cut the company’s workforce by 20 percent and investments in the Metaverse by 50 percent. Zuckerberg (above) has aggressively pushed billions of dollars into the company’s VR projects

“In 2023, we will focus our investments on a small number of high-priority growth areas. So that means some teams will grow significantly, but most of the other teams will remain flat or shrink over the next year. All in all, we expect to end 2023 as either about the same size, or even a slightly smaller organization than we are today,” Zuckerberg said during the latest earnings call in late October.

The social media company had cut plans to hire engineers by at least 30% in June, with Zuckerberg warning employees to prepare for an economic downturn.

Meta’s shareholder Altimeter Capital Management had previously said in an open letter to Mark Zuckerberg that the company needs to streamline by cutting jobs and capital expenditures, adding that Meta has lost investor confidence as it ramped up spending and turned to the metaverse.

The push to cut thousands of jobs comes after reports that Meta wanted to cut 12,000 people from the company. Pictured: Employees at Meta’s Silicon Valley office in Menlo Park

Altimeter said annual free cash flow could be doubled to $40 billion if Zuckerberg cuts 17,000 jobs, cuts capital spending by at least $5 billion to $25 billion a year and limits annual investment in the Metaverse to $5 billion instead of the current $10 billion.

“Meta needs to rebuild trust among investors, employees and the tech community to attract, inspire and retain the best people in the world,” Altimeter CEO Brad Gerstner wrote in the letter. “Basically, Meta needs to get fit and focused.”

Several tech companies, including Microsoft, Twitter and Snap, have cut jobs and cut workforces in recent months as global economic growth slows due to higher interest rates, rising inflation and an energy crisis in Europe.

Meta has spent billions and hired thousands of workers around the world to build the Metaverse, which refers to a shared digital environment that uses augmented or virtual reality technology to make it more realistic.

But the company’s dreams have fallen short as the Reality Labs unit, which works on augmented and virtual reality, has continuously reported staggering losses. It lost $5.8 billion in the first six months of the year.

Altimeter said such massive investments “in an unknown future are super-sized and terrifying, even by Silicon Valley standards.”

A report from WSJ last month said Meta’s Metaverse will be more than 300,000 users short by year-end, despite Zuckerberg investing billions and hiring hundreds for the venture.

Zuckerberg has repeatedly defended his decision to invest heavily in ‘Metaverse’

Just under a year since Zuckerberg renamed Facebook Meta, internal documents obtained earlier this month revealed that his Metaverse virtual reality universe is struggling to achieve its goals.

This is evident from documents seen by the Wall Street Journal. The company planned to reach 500,000 users of its virtual reality platform, Horizon Worlds, by the end of 2022. The number at the time of writing is less than 200,000, still well below the revised target of 280,000 by the end of 2022.

The documents also reveal that the majority of those 200,000 users do not return once they enter the system, with many complaining that most areas have no other users.

They’ve also complained about avatars eerily floating around with no legs – a problem Meta says it will fix in the coming months.

Since the spring of 2022, the number of Horizon Worlds users has been decreasing.

Less than ten percent of the worlds in the Metaverse receive more than 50 visitors and the majority of these worlds receive zero visitors.

Zuckerberg has claimed that the Metaverse is the future, despite several negative reviews about how the virtual world looks and works