Sunday 6 November 2022 11:01 PM Facebook planning 'large scale layoffs' following hiring freeze and share ... trends now
Facebook is planning to begin large-scale layoffs this week that will affect thousands of employees with an announcement planned as early as Wednesday.
Facebook parent company Meta Platforms Inc forecast a weak holiday quarter and significantly more costs next year wiping about $67 billion off Meta's stock market value, adding to the more than half a trillion dollars in value already lost this year.
The disappointing outlook comes as Meta is contending with slowing global economic growth, competition from TikTok, privacy changes from Apple, concerns about massive spending on the metaverse and the ever-present threat of regulation.
The impending layoffs were first reported in the Wall Street Journal.
Chief Executive Mark Zuckerberg has said he expects the metaverse investments to take about a decade to bear fruit.
In the meantime, he has had to freeze hiring, shutter projects and reorganize teams to trim costs.
Facebook is planning to begin large-scale layoffs this week that will affect thousands of employees with an announcement planned as early as Wednesday. Facebook CEO Mark Zuckerberg is planning to lay off up to 12,000 underperforming Facebook workers
Meta's share price has continued to plummet with a 73 percent fall since the start of 2022
Since the start of 2022, Meta's shares have taken a precipitous fall
Meta Platforms Inc. has been ranked the worst performer on the S&P500, as its shares continue to slump amid concerns over the development its costly virtual world - the Metaverse
Meta shareholder Altimeter Capital Management urged Mark Zuckerberg to cut the company's workforce by 20 percent and investments in the Metaverse by 50 percent. Zuckerberg (above) has aggressively pushed billions of dollars into company's VR projects
'In 2023, we're going to focus our investments on a small number of high priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size, or even a slightly smaller organization than we are today' Zuckerberg said on the last earnings call in late October.
The social media company had in June cut plans to hire engineers by at least 30%, with Zuckerberg warning employees to brace for an economic downturn.
Meta's shareholder Altimeter Capital Management in an open letter to Mark Zuckerberg had previously said the company needs to streamline by cutting jobs and capital expenditure, adding that Meta has lost investor confidence as it ramped up spending and pivoted to the metaverse.
The push to cut thousands of jobs comes after reports that Meta was looking to slash 12,000 people from the company. Pictured: Employees in Meta's Silicon Valley office at Menlo Park
Altimeter said annual free cash flow can be doubled to $40billion if Zuckerberg cuts 17,000 jobs, trimmed capital expenditure by at least $5billion to $25billion a year and capped annual investment in the Metaverse to $5billion instead of the current $10billion.
'Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world,' Altimeter CEO Brad Gerstner wrote in the letter. 'In short, Meta needs to get fit and focused.'
Several technology companies,
