Facebook’s parent company Meta has started massive layoffs. The company has decided to lay off more than 11,000 employees. The American tech company has taken this decision to reduce the cost.
Image Credit source: AP
Tough days continue for the employees of tech sector companies. After Twitter, the employees of another giant company have now been hit by layoffs. Facebook’s parent company Meta has decided to fire 11,000 employees. According to the company, the decision to lay off employees has been taken to cut costs. In fact, the company’s results have been disappointing. There has been a sharp decline in the company’s earnings during the quarter. To deal with this, Meta had planned to cut costs. Today’s layoff is a step in this direction.
Meta team will decrease by 13 percent
The company’s CEO Mark Zuckerberg said through a blog today that he is going to take the toughest step ever in the history of Meta. The company has decided that it will reduce the size of its team by 13 percent and will lay off 11,000 qualified employees. Along with this, Zuckerberg said that he is going to take many more such steps to bring the company back on track. This includes important steps to cut costs and reduce costs. Zuckerberg has said that he takes responsibility for this decision as well as the reasons that have forced him to take this step.
These are the 5 big reasons for layoffs
- Facebook’s parent company Meta has made a big plan for layoffs. This will be the biggest layoff in the history of 18 years. According to a report in the ‘Wall Street Journal’, thousands of employees will be laid off in Meta. It has been said in the report that the jobs of more people can be lost from meta than the number of layoffs in Twitter. 5 big reasons are being told behind this. The first reason is the loss of $ 3.7 billion to Meta’s virtual reality company Reality Labs in the last quarter.
- The second reason is the low level of Meta’s stock trading. Meta stock is currently at its lowest level since 2016. Last month, the company was valued at $ 270 billion, while last year the value of the company was more than $ 1 trillion. It is being said that the expenses of the company have increased rapidly while the earnings are not being made accordingly. The company has planned layoffs only to reduce the cost. Investors fear that its social media business may be in danger.
- Meta’s market cap has declined by $230 billion as on February 3, 2022. This is the biggest drop in a single day in the history of any American company. Meta stock fell 26.4% on the day the company reported that its daily user numbers declined for the first time. This big fall is being told in Meta’s stock, which has had a profound effect on its business. Because of this the company is said to be under tremendous pressure.
- The next reason is the huge drop in the wealth of Meta CEO Mark Zuckerberg. Since the beginning of the year 2022, Zuckerberg’s personal wealth has been seeing a steady decline. Zuckerberg holds 13% stake in Meta. Another major reason is the decline in Meta advertising revenue. Meta has estimated that there could be a loss of $10 billion in ad revenue in 2022. This decline is being seen because the company has changed the privacy rules.
- There has also been a huge drop in the ranking of Meta. Meta is the worst performer in the S&P 500 list in 2022. Meta’s stock has fallen up to 73% since the beginning of this year. There is also a huge reduction in Meta’s free cash flow. Meta’s free cash flow was $12.7 billion at the beginning of 2021, which dropped to $316 million in the third quarter of 2022. In the midst of huge losses, Meta has continuously recruited employees. In 2020 and 2021, 27,000 employees were laid, while in the 9 months of this year, 15,344 employees were recruited.
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