Meta, formerly Facebook is renowned for being one of the top companies in the world. The company behind this popular social media platform has a longstanding reputation of success. Although Meta holds such a status in the global economy, the effects of inflation and higher interest rates are hitting it hard.
Over the past days, it has been announced that Meta will be implementing job cuts, with thirteen percent of employees expected to be impacted. This amounts to over eleven thousand employees. These reports were confirmed by the CEO of the company Mark Zuckerberg, affirming what the media had been citing.
In anticipation of the fourth quarter earnings, the company took a grim approach which concerned investors and plummeted its shares. The reason for this ties to the expenses, which increased significantly.
Mark Zuckerberg addressed employees through a letter, implying that this is the most difficult period within the organisation’s history. He stated that the company will need to make the tough call of allowing more than eleven thousand of its talented employees go. The company is undergoing a process to become leaner and more efficient. This is to be achieved by the layoffs, a hiring freeze which shall be extended to the first quarter of 2023 and the reduction of discretionary spending.
The financial data of the company is not encouraging investors as expenses rose by nineteen percent in the third quarter when compared to the same last year. Sales dropped by four percent, whilst income reduced by forty-six percent.
In his address to employees, the CEO stated that he will be held accountable for these decisions and expressed his apologies to all those impacted. The reductions in headcount are expected to impact all organisations within Meta. Emphasising the importance of these measures, Mark Zuckerberg stated that there is no other option and thanked employees for their contributions to Meta.
Laid off employees will get sixteen weeks of pay. An additional two weeks of pay will be given for every year of service. The company will cover health insurance for impacted employees for a duration of six months.
One of the major projects that Meta is working on is the metaverse. The metaverse refers to a digital world that can be accessed via virtual reality and augmented reality headsets. The project has cost Meta almost nine and a half billion dollars in 2022, and further expenditure is expected in the coming years.
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