Meta Platforms prepares mass layoffs

Meta Platforms Inc is preparing mass layoffs this week. Layoffs could affect thousands of employees, according to the Wall Street Journal, which cites people familiar with the situation at the company.

Mass layoffs at Meta Platforms (formerly Facebook) were affected by the following negative factors: global economic growth is slowing down, fierce competition from TikTok, Apple’s new privacy policy, massive investments in the metaverse. All of these negative factors could bring down the market value of Meta shares by $67 billion.

When will investments in the metaverse pay off?

Mark Zuckerberg does not expect huge investments in the metaverse to pay off quickly. According to his predictions, the metaverse will begin to bear the first financial fruits in 10 years. The bet on the metaverse formed the basis of Zuckerberg’s new strategy. The company froze the hiring of new employees, closed some projects and reorganized the team to reduce costs.

Meta Platforms Inc plans for 2023

In 2023, the company plans to invest only in the most priority areas. This suggests that some teams will grow strongly, while most other divisions will continue the same situation, including more cuts during 2023 are not ruled out. At the end of October, Zuckerberg announced that in 2023 the company will remain the same size or become slightly smaller. There is no talk of expansion.

In June 2022, the company made decisions to cut its hiring of engineers by 30%. Zuckerberg warned employees that the economic downturn could be reflected in layoffs.

Analyst company Altimeter Capital Management (owns about 0.1% of Meta shares) wrote an open letter to Mark Zuckerberg with recommendations. Experts advised Zuckerberg to cut jobs and capital expenditures as Meta loses investor confidence due to increased spending on the metaverse.

The economic downturn has also affected other technology companies. Elon Musk also recently announced that he plans to cut the number of employees at Twitter.