Facebook’s parent company, Meta has just shedded more than 11,000 employees, about 13% of its staff at the massive tech slowdown in Silicon Valley these months. Following the high demands of online commerce in the pandemic during 2020 to early 2022, several giant tech companies including Meta went on a hiring blitz in an attempt to meet the growing demand. However, everything is not what it seems.
Recently, Elon Musk just laid off around half of Twitter’s staff. Stripe CEO Patrick Collison also announced that the company was shedding 14% of its staff members. The massive workforces of tech companies in Silicon Valley are causing a lot of troubles for their own organizations. This industry has had several difficulties since the beginning of this year when users are no longer stuck at home and spending most of their time on the Internet. Less users and less traffic mean less advertisements. Less advertisements mean less incoming money. Meanwhile, more employees means more outcoming money. Reasonably, these companies have to take action to save their own.
Mark Zuckerberg, the founder of Facebook and Meta, stated this tragedy as “some of the most difficult changes we’ve made in Meta’s history”. Like other companies, it overhired during the pandemic and the growth has not been stable at the end of the pandemic. He continued in a message to employees “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected”.
Meta currently has around 87,000 employees. Since 2004 when it was founded, this is the very first time that this incident is happening to this gigantic social network. This year, Facebook has been failing like never before. Also, Zuckerberg’s net worth has been also aggressively decreasing. Earlier this year, he decided to invest billions into the Metaverse. So far, there is no sign that it is going to be successful. Meanwhile, apparently, Facebook is going through a crisis that never happened earlier.
Zuckerberg also showed his disappointment with this decision and blamed the length of the ad revenue slowdown and increased competition from other rivals for this incident. “This is a sad moment, and there’s no way around that,” the CEO of Meta wrote. On top of that, Meta’s stock value has also dropped from $347 to $133 in one year.
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