In today’s news we have another update of a huge tech company cutting their workforce. Although not as big as Twitter and Mr. Musks huge cuts there is still a huge layoff wave at Facebook that was just announced. There was just a press release put out about them letting go of 11,000 employees. We’ll be looking at the reasons why Facebook decided to let these workers go, and what this means for the future of the company in our quick write up.
What happened at Facebook/Meta?
There are always going to be reasons why companies have to let people go, and I have yet to ever hear of a positive reason for layoffs. Obviously, as one of the biggest companies in the world Facebook ( or Meta ) gets a lot of attention whenever it does anything. So we will take a look at the common reasons that we have seen for these massive layoffs.
Facebook owner Mark Zuckerberg has announced that 11,000 workers will be terminated after the company’s revenue has really started to take a massive hit. The social media giants earnings have been hit hard, which we will cover in the why did it happen below…
Basically 1 in 8 people were let go because they apparently weren’t needed anymore. Which is a huge amount of people considering Meta employs about 80k people around the world.
“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. I got this wrong, and I take responsibility for that.”Mark Zuckerberg
Why did Facebook lay off so many people?
Ad revenue down
The company has been hit by many high-profile scandals in recent years, which has led to calls for it to be more tightly regulated. This in turn made Apple tighten how much data is shared with Facebook while its customers are visiting the site. This had a domino affect on the advertising aspect of Facebook, because the better the targeting the better the ad performance. But if there is less targeting, they will make less revenue as businesses will not have as good of performance from their ad campaigns.
Overspending during Covid times
The next big cause of this layoff is that they seemingly hired too many people at the start of Covid. It makes sense though, if people are locked inside then maybe it is best to just keep trying to make Facebook the place where they want to be. But the bet on the VR/ Metaverse still hasn’t paid out… and that is after about 8 BILLION in spending.
Zuckerberg has said that the company will be “refocusing” its efforts on new areas such as messaging and Groups. He also announced that Facebook will set up a new “integrity” team to tackle the spread of misinformation on the platform.
Investors unhappy with the bottom line
Meta has been facing increased pressure to improve its bottom line as Wall Street investors have been pushing for Facebook to focus on making money, and layoffs are one way to achieve that goal. So if money isn’t coming in faster, the other way is to cut your operating costs. We have seen this recently with Twitter laying off a lot of their staff as well.
Slow down in productivity
The last point is that Facebook may be trying to streamline its operations in the wake of all the negative publicity it’s received. The company has been embroiled in scandals surrounding data privacy and election meddling, and it may be trying to trim down its workforce so that it can better focus on addressing those issues. We have seen public postings about the Meta CEO saying the output is not where it should be, so maybe that was foreshadowing for the layoffs…or maybe people did just get lazy?
Now what happens at Facebook?
Since it was founded in 2004, Facebook has grown rapidly, becoming one of the world’s most popular social networking platforms. However, recent years have seen the company face anumber of challenges, and this has led to layoffs.
It’s been a difficult year for Facebook. The social media company has faced a lot of criticism, and they’ve had to make some tough decisions. They’ve laid off a lot of their staff, and they’re still struggling to deal with the fallout from the Cambridge Analytica data scandal. But despite all of this, Facebook is still one of the most popular social media platforms in the world. And it looks like they’re going to continue to be a major player in the years to come.
If you want more info you can check out this article about the layoffs and the package that the employees were offered. While we understand there is a business need to be profitable, there is also a human side that goes along with these stories. And as these larger companies lay off so many of their employees it is harder and harder for them to find jobs quickly as the big companies just won’t be hiring at the same pace as they are used to.