Meta’s stock hasn’t seen good times in a while. Now the worsening situation will affect employees, and Meta will make the first such large layoffs in its 18-year history.
Meta’s third-quarter profit fell by more than half year-on-year to $4.4 billion, with sales down 4% to $27.7 billion. And Meta stock has lost more than two-thirds of its value this year.
Like other social networking technology companies, Meta is being hit hard by ever-declining ad revenue. This is due to Apple’s new attitude towards sharing its users’ data, as well as the current economic and geopolitical situation.
Meta logo seen displayed on a smartphone and in the background the Facebook logo
The company’s boss Mark Zuckerberg commented on the situation.
“Not only has online commerce reverted to earlier trends, but the macroeconomic downturn, increased competition and loss of advertising signals have caused us to have much lower revenue than I expected.”
The company needs to be more capital efficient
Mark Zuckerberg hinted at the layoffs back in October, when he gave a prediction for the next year.
“In 2023, we will focus investments on a small number of high-priority growth areas. That means some teams will grow, but most others will stagnate or shrink next year. “
He stressed that the company needs to become more capital efficient, and said the company will shift resources to “high-priority growth areas” such as its AI search engine, advertising and commerce platforms, as well as its metaverse, or virtual universe, project.
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And it’s the heavy focus on the metaverse that is sparking considerable debate among experts and investors. After all, this is a field in its infancy and will need a lot of time and investment before it goes anywhere significant. After that, it will still be a while before the metaverse is a truly profitable sector for the company.
Zuckerberg, however, has big plans for the metaverse.
“We need to get to the point where the 200 million people who buy new computers every year for their jobs can do some or better yet all of their work in the metaverse.”
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