The Facebook group Meta lays off more than 11,000 employees in the largest job loss in its history. That’s about 13 percent of the workforce, CEO Mark Zuckerberg said Wednesday. He pointed out that he overestimated the online boom at the start of the corona pandemic and therefore increased investment. But now the online business has returned to previous trends.
In addition, the weakening economy and increased competition weighed on sales. Zuckerberg takes responsibility for the decisions and their consequences.
Meta has the problem that its core business with advertising in online services such as Facebook and Instagram generates less turnover than before. At the same time, the development of virtual worlds, promoted by founder and boss Mark Zuckerberg under the keyword Metaverse, is costing more and more money. Zuckerberg recently announced that the number of employees at Meta can no longer grow for the time being and could also shrink next year because the group would focus on fewer areas.
Metaverse as Milliardgrab
In the quarter alone, the Reality Labs division, which is working on the Metaverse, posted an operating loss of nearly $3.7 billion (the equivalent of €3.7 billion). Since the beginning of the year, a deficit of $9.4 billion has built up – with sales of $1.4 billion in the area. And Zuckerberg announced that Reality Labs’ losses will “increase significantly” over the next year.
The decline in turnover accelerated. Meta is affected by the frugality of advertisers, who are spending less on online advertising in the face of high inflation and economic concerns. Meta sales declined 4% year over year to $27.7 billion. The bottom line is that profits fell by 52 percent to about $4.4 billion. The stock price has been under pressure for months because investors find the investments of Metaverse too high.
Source: Krone
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
