A disappointing prognosis comes as Meta battles concerns about huge spending on the metaverse
According to persons with knowledge of the issue, The Wall Street Journal reported on Sunday that Meta Platforms Inc. The Wall Street Journal reported Sunday, citing people familiar with the situation, that Meta Platforms Inc. plans to make an announcement as early as Wednesday and initiate mass layoffs this week that will affect thousands of employees.
Meta decided not to respond to the WSJ report.
In October, Meta, the parent company of Facebook, forecast a dismal Christmas quarter and much-increased prices in 2019, which will drop Meta’s market value to around $67 billion and add to the more than half a trillion dollars of value already lost this year.
The discouraging news comes as Meta battles a sluggish world economy, TikTok rivalry, Apple privacy changes, concerns about big spending on the metaverse, and the looming danger of regulation.
The investments made in the metaverse will not start to pay off for about ten years, according to Chief Executive Mark Zuckerberg. He had to cease hiring, terminate projects, and reorganise staff in order to save expenditures in the meantime.
He had to cease hiring, terminate projects, and reorganise staff in order to save expenditures in the meantime.
“We’re trying to concentrate our spending in 2023 on a limited number of high-priority growth sectors. This indicates that while most teams will remain stable or contract over the next year, some teams will experience considerable growth. Overall we expect to have about the same size or even one by 2023a little smaller than we are now. “On the last earnings call in late October,” Zuckerberg said.
The social media industry had reduced its ambitions to hire engineers by at least 30% in June, and Mark Zuckerberg had advised staff to brace for a slowdown in the economy.
The company needed to streamline by cutting employment and capital expenditures, according to an earlier open letter from Meta’s shareholder Altimeter Capital Management to Mark Zuckerberg. As a result of Meta’s increasing spending and shift to the metaverse, they also claimed that investors had lost faith in the company.
As global economic growth slows as a result of increasing interest rates, rising inflation, and the European energy crisis, several technological businesses, including Microsoft Corp., Twitter Inc., and Snap Inc., have reduced employment in recent months.