The social media giant Meta is preparing staff cuts as its grand metaverse ambitions cool off, reported WSJ. The concern resurfaced due to rising discontent among shareholders. Last month, Investment firm Altimeter Capital sent an open letter to Zuckerberg and Meta, recommending them to slash off staff and temper its metaverse plans.
Social media and tech giants saw rapid growth during the pandemic and subsequent lockdowns. Meta added over 27,000 employees in 2020 and 2021 combined to boost its metaverse efforts. However, now that normality is returning, the metaverse craze among people is thinning out, prompting Meta to re-analyse the situation.
Considering the present scenario, Meta is expected to announce large-scale layoffs this week officially. Meta staff has already been instructed to cancel non-essential travel, per the sources.
The firm reportedly had more than 87,000 workers as of September. In the company’s third-quarter earnings call last month, Zuckerberg said that some teams will still grow meaningfully, while some will stay flat or shrink over the next year.
He also said the firm expects to end 2023 as either roughly the same size or even a smaller organization than it is today. The earning reports showed a painful 52% drop in net income, to $4.4 billion from $9.2 billion last year.
With increased expenses, especially for its Metaverse division and reality labs, the firm reflected a $3.7 billion operating loss in its virtual and augmented reality projects. On the other hand, Meta’s metaverse Horizon World struggled to attract new users. Users kept on declining to less than 200,000 over the course of the year.
Even after all these market downtrends, Zuckerberg still sees the firm reigning in the virtual reality space in the coming years.
