Facebook and Instagram's parent company, Meta is planning a large-scale layoff this week, reported the Wall Street Journal. It is still unclear how many people would be cut.
In September, Meta had 87.314 employees which was up by 28 per cent from last year. But The Wall Street Journal claims that the lay-off would affect approximately half of the company workforce.
Why is Meta laying off employees?
The Silicon Valley company has been struggling financially for months and has been increasingly reducing costs. The tech giant has spent billions of dollars on the metaverse, an immersive online world, just as the inflation has increased while the global economy has slowed. Even investors have shown concern regarding the company's investment on metaverse. The company's virtual reality arm lost $3.7 billion this quarter and a total of $9.4 billion this year.
Read more: Key Meta investor slams Zuckerberg for spending too much in the metaverse
In addition to this digital advertising that is one of the major contributors to Meta's revenue has been weakened as many advertisers have pulled back due to global slowdown. The company was also hit when Apple made some privacy changes that affected the ability to push out target mobile ads to Apple users. Last month the tech giant posted an almost 50 per cent slide in quarterly profits making it the second straight sales decline.
The company at that time said it would be making changes across the board in order to operate more efficiently. These changes include shrinking teams and limiting hiring only in areas of high priority. Mark Zukerberg, Meta's chief executive, has been hinting for tougher times for months; he had earlier said that the company by the end of 2023 would either stay the same size or would go slightly smaller.
Tech giants and job cuts
Meta like other tech giants will be laying off employees as the inflation rises and the economic conditions grow more challenging. After having a boom in the pandemic the tech firms are now getting affected by the impact of global economic jitters. Twitter last week laid off nearly half of the company's staff. Even companies like Lyft, Stripe, Snap and Coinbase are announcing job cuts this year.
Not just laying off, tech firms are also freezing their hiring. Amazon has paused its corporate hiring as the economy seems to be uncertain. This was an addition to last month's freeze when the company halted corporate and technology hiring for its retail side.
