As reported by the Wall Street Journal, Meta, the owner of Instagram and Facebook, will start making significant layoffs this week.
Investors are hesitant to make significant investments in disappointing metaverse offers that might take years to become lucrative if they ever do, as seen by the company’s share price decline of more than 70% this year. Even though TikTok and privacy improvements on Apple devices pose serious challenges to Meta, the social media platform is still a dominant force in the industry.
According to leaked papers, even meta workers who are working on the metaverse services have expressed dissatisfaction with them, with one saying, “An empty world is a sad world.” CEO Mark Zuckerberg has been under pressure from investors to reduce the firm’s investments in the metaverse, but to no avail.
According to Zuckerberg, the metaverse is the company’s future, and it will need more than $10 billion in investments per year. According to the Journal, the initiative has cost the corporation $15 billion since the start of last year. In the most recent quarter, Meta’s free cash flow decreased by 98% as a result of its rapidly increasing costs.
Facebook layoffs follow even more severe layoffs at Twitter, where the firm’s new owner, Elon Musk, emphasized the need for the cuts in a Friday tweet that said, “There is no option when the firm is losing over $4M.”
Many investors were unprepared for Meta’s difficulties this year. Jim Cramer, the charismatic anchor of CNBC’s Mad Money, is one of them. Earlier this year, he repeatedly informed viewers that he believed Meta shares would increase once again. After Meta disclosed yet another challenging quarter late this month, Cramer somberly admitted, “I did something wrong here.” I was mistaken. I had faith in this management group. That was a bad decision. I regret the extreme hubris displayed here.
A Washington state judge last month penalized Facebook almost $25 million for breaking campaign finance disclosure regulations, further aggravating the company’s problems. The judge stated in a press release that Facebook “willfully ignored Washington’s election transparency requirements.” However, it wasn’t enough. In court, Facebook contended that these laws should be ruled illegal. That is stunning.
Joe Rogan, a podcaster, asked Mark Zuckerberg about running the firm in August. It nearly feels like you get hit in the gut when you wake up every day. You check my phone first thing in the morning and see that you have a gazillion texts. Typically, it is bad. People tend to tell me the nice stuff in person.
The layoffs won’t come as a complete surprise to Meta staff. Officials from the firm recently advised staff to postpone unnecessary travel, and at a company-wide meeting in June, Facebook CEO Mark Zuckerberg said, “Realistically, there are probably a bunch of individuals at the company who shouldn’t be here.”
