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Facebook parent company Meta lays off 11,000 employees amid sluggish earnings – National

Facebook’s parent company Meta will lay off 11,000 people, about 13% of its workforce, as it deals with sluggish sales and a slump across the tech industry, CEO Mark Zuckerberg wrote to employees on Wednesday. said in a letter.

The job cuts come just a week after Twitter made massive layoffs under its new owner, billionaire Elon Musk. Other tech companies that have rapidly hired during the pandemic have made numerous layoffs.

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Zuckerberg also said he decided to hire aggressively, expecting rapid growth even after the pandemic is over.

“Unfortunately, this didn’t go the way I expected,” Zuckerberg said in a prepared statement. “Not only is online commerce returning to its previous trend, but the macroeconomic downturn, increased competition, and loss of advertising signals have resulted in revenues far below expectations. I take responsibility for that.”

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Meta, like other social media companies, enjoyed a financial boost during the lockdown era of the pandemic as more people stayed home and scrolled on their phones and computers. But as lockdowns lifted and people started going out again, revenue growth began to slow.

A slowing economy and a bleak outlook for online advertising, Meta’s biggest source of revenue, are compounding Meta’s woes. This summer, Meta posted its first-ever quarterly revenue decline, followed by an even bigger fall in the fall.

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Some of the pain is company-specific, but some is tied to broader economic and technological forces.

Twitter laid off about half of its 7,500 employees last week. This is part of a chaotic overhaul spearheaded by Musk. He tweeted that he had no choice but to cut staff “when the company is losing more than $4 million a day,” but did not provide details of the losses.

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Meta has made investors uneasy by shifting its focus away from social media and pouring more than $10 billion a year into the “metaverse.” Zuckerberg predicts that the Metaverse, an immersive digital universe, will eventually replace smartphones as the primary way people use technology.

Meta and its advertisers brace for a possible recession. There’s also the issue of Apple’s privacy tools. This makes it difficult for social media platforms like Facebook, Instagram, and Snap to track users and show ads to them without their consent.

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Competition from TikTok is also becoming an increasing threat as young people flock to the video-sharing app via Meta-owned Instagram.

“We’ve cut costs across the business, with smaller budgets, fewer perks, and smaller real estate square footage,” Zuckerberg said. “We are reorganizing our team for efficiency. Did.”

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Mr Zuckerberg told employees on Wednesday that they would receive an email letting them know if they would be laid off. Those who lose their jobs will have their access to most company systems cut off because of the sensitivity of the information, he said.

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“We have email addresses active throughout the day so everyone can say goodbye,” Zuckerberg said.

Zuckerberg said ex-employees will get 16 weeks of base pay, plus an extra two weeks each year. Health insurance coverage for these employees and their families will continue for six months.

Meta Platforms Inc. shares jumped 4% before the opening bell on Wednesday.

These employees receive 16 weeks of base salary plus an additional two weeks each year at the company, Zuckerberg said. Health coverage for retirees and their families continues for six months.

© 2022 The Canadian Press

Facebook parent company Meta lays off 11,000 employees amid sluggish earnings – National

Source link Facebook parent company Meta lays off 11,000 employees amid sluggish earnings – National

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