Facebook parent Meta lays off workers as it faces competition from TikTok

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Facebook’s parent company Meta has announced plans to cut more than 11,000 jobs, or 13% of the company, as the social media giant seeks to cut spending and transform its business model into a… more competitive digital advertising.

“We are also taking a number of additional steps to become a leaner, more efficient business by reducing discretionary spending and extending our hiring freeze through the first quarter,” Meta CEO Mark Zuckerberg said in a statement. statement Wednesday, adding that the layoffs were “some of the toughest changes we’ve made in Meta’s history.

Zuckerberg added that everyone in the company will soon be receiving an email “letting you know what this layoff means for you.”

The company was due to start laying off thousands of workers this week in a bid to contain costs and refocus its existing workforce on business priorities, according to a person familiar with the matter who spoke on on condition of anonymity to discuss company strategy. .

The layoffs mark a tumultuous new period in Silicon Valley, as tech giants long known as recession-proof bastions of economic power have laid off huge workers in recent weeks. For years, companies have grown rapidly and hired at breakneck speeds. Facebook alone increased its workforce by 28% year over year to 87,314 employees at the end of September, according to regulatory filings.

One of the biggest eliminations occurred on Twitter last week, where new owner Elon Musk cut around half of the company’s 7,500 employees – to the point that over the weekend some workers were called and invited to return.

On Tuesday, media reported hundreds of layoffs at tech giant Salesforce, which sells enterprise software. Ride-sharing app Lyft, financial services platform Stripe and digital real estate marketplace Zillow have also cut staff, according to company and media statements.

Meta set to join growing list of tech industry layoffs

The layoffs at Meta – which changed its name from Facebook just over a year ago – come as the company makes a big bet on building the Metaverse. Part of the hiring boom in recent years has focused on creating immersive digital realms accessible through virtual reality, which chief executive Mark Zuckerberg says will be the next big computing platform after phones. mobile and will replace some in-person communications.

The company is investing heavily in virtual reality headsets and other technologies in an attempt to capture the market. Meta said it expects operating losses at Reality Labs, the division working on its hardware offerings, to increase even more in 2023.

Last month, the company unveiled its new $1,500 VR headset that it says will transform workers’ ability to collaborate with colleagues and get their jobs done.

But so far, that vision has been slow to materialize, in part because the company is still developing the underlying technology and a wider range of applications that would make it appealing to the general public. While the company currently dominates the VR headset market, Meta is likely to face significant competition in the Apple space.

Meta operates social media platforms Facebook and Instagram and messaging app WhatsApp, among other initiatives. Its blue app’s more traditional advertising-based business model has been hit particularly hard by larger economic challenges, including some digital advertisers cutting spending as rising inflation and the invasion of the ‘Ukraine by Russia have created market instability.

The company is also increasingly fending off competition for marketing dollars and users from upstart rivals such as TikTok, the short-form video platform that has taken off among younger generations. This year, the company reported that Facebook had lost daily users for the first time in its 18-year history, although user growth has since recovered. Last month, Meta announced the second straight drop in quarterly revenue.

And Meta estimated it will have lost $10 billion this year after Apple introduced privacy restrictions that forced app makers such as Facebook to explicitly ask users if they could collect data about their internet activity, harming the social media company’s ability to facilitate targeted advertising campaigns. Facebook argued at the time that the new privacy rules would hurt small businesses that need granular user information to find potential customers.

In the face of these challenges, Meta executives increasingly warned employees that the company was entering a new era of higher performance expectations and greater focus on its most important goals.

On a recent call with investors, Zuckerberg touted the company’s decision to emulate the same strategy that made TikTok so popular: showing users entertaining content from strangers on their friends’ and family’s posts. family. The company also promotes its short-form video product, Reels, on Instagram and Facebook, as well as business messaging.

During the same call, Facebook said it plans to slow hiring significantly and keep its workforce next year at about the same level as it is today.

Facebook employees fear cuts after direct warnings from Zuckerberg and executives

More than a month ago, Meta said it would stop making new offers to candidates, sourcing candidates and approving internal transfers while the company reevaluates how best to prioritize its staffing resources. , according to a note posted on the company’s internal bulletin board viewed by The Post of Washington.

Last summer, Lori Goler, the company’s chief human resources director, advised managers to implement the “rigorous performance management” practices that Meta relied on before the pandemic, such as giving feedback criticism of struggling employees.

In July, Meta engineering manager Maher Saba instructed engineering managers in an internal memo to identify and eliminate their underperforming employees.

“If a direct report is coasting or performing poorly, we don’t need them; they are failing this business,” Saba wrote. “As a manager, you can’t allow someone to be net neutral or negative for Meta.”

Such messages from corporate executives created a wave of anxiety and resentment among Facebook employees. Some fear losing their jobs or seeing their annual premiums reduced. Others worry that an already harsh corporate environment will become even more competitive as employees compete for fewer coveted positions, The Post reported.

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