Mark Zuckerberg Suggests Layoffs And The End Of An Era For His Social Media Behemoth

Mark Zuckerberg, chief executive officer of Meta Platforms Inc., announced extensive plans to restructure teams and slash staff for the first time ever, bringing to an end a period of tremendous development at the social media behemoth. In what would be the first significant budget cut since Facebook’s launch in 2004, Zuckerberg announced that the firm would halt hiring and reorganize some teams in order to save costs and refocus priorities. According to him, Meta will probably be smaller in 2023 than it was this year. The revelation caused the already-declining price of Meta stock to drop even lower, dropping 3.7% from Wednesday’s closing. So far this year, the shares have decreased by 60%.

The additional cost cuts and a hiring freeze are Meta’s most glaring admission that the growth in advertising revenue is slowing in the face of increased user attention competition. It’s not the best time to make cuts; in addition to financial strains, the company’s advertising division, which depends on accurate consumer targeting, has lost some of its competitive edges as a result of new privacy limits from Apple Inc. on tracking iPhone users. Younger people are leaving Instagram in favor of TikTok. And Zuckerberg is placing a costly wager on the metaverse, an immersive virtual reality future in which he envisions humans someday communicating, an endeavor he has predicted will be financially unsuccessful for many years.

Meta announced earlier this year that it would postpone offering full-time jobs to summer interns and would slow hiring for some management positions. Zuckerberg said in the meeting that the freeze was required to “make sure we’re not adding people to teams where we don’t anticipate to have positions next year.”

During its results call for the first quarter, Meta stated that yearly spending will be about $3 billion lower than anticipated, reducing an estimated range that had been as high as $95 billion. The business halted a dual-camera watch it was developing to rival the Apple Watch in previous efforts to save costs.

Other businesses that rely on advertising and are experiencing difficulties include Meta. In addition to asking staff to manage their spending and cut back on travel and marketing expenses, Twitter Inc. implemented its own hiring restriction in May. Additionally, Snap Inc. eliminated 20% of its personnel in August, while Alphabet Inc.’s Google announced that it will halt hiring during the second half of the year.