Facebook layoffs and the Internet: When will we know when to expect the next big tech company? — Mark Gandhi, the CEO, and the management of Meta
Facebook-parent Meta is said to be planning the first significant layoffs in its history as the company grapples with a shrinking business and fears of a looming recession.
On a conference call last month to discuss the company’s third quarter earnings, CEO Mark Gandhi said that he expects the company to be roughly the same size as it is today.
The possible cuts come as tightened advertiser budgets and Apple’s iOS privacy changes have weighed on Meta’s core business. In the last quarter of the year, the company posted a revenue decline and reported a cut in profit compared to the previous year. Billions are mainly to blame for the drop in profitability. The future version of the internet is called the metaverse and is expected to be years away.
Once boasting a market capitalization of more than $1 trillion last year, Meta is now valued at about $250 billion. (After reports of the job cuts, Meta’s stock opened more than 5% higher on Monday morning.)
It is not the only tech company that is rethinking staffing. In a stunning shift for an industry sometimes thought of as untouchable, a number of tech companies have announced hiring freezes or job cuts in recent months, often after having seen rapid growth during the pandemic.
Last week, rideshare company Lyft said it was axing 13% of employees, and payment-processing firm Stripe said it was cutting 14% of its staff. The same day, e-commerce giant Amazon said it was implementing a pause on corporate hiring.
The company was restructured on Friday under its new owner, Musk. The cuts impacted its ethical AI, marketing and communication, search and public policy team, among other departments.
In the days since, however, Twitter
(TWTR) has reportedly asked dozens of laid off employees to return, according to Bloomberg.
In a letter to employees announcing the job cuts, Marc Benioff, Salesforce’s chair and co-CEO, admitted to growing headcount too much earlier in the pandemic and said most of the job cuts will take place over the coming weeks.
I was thinking a lot about how we came to this moment. “As our revenue accelerated through the pandemic, we hired too many people leading into this economic downturn we’re now facing, and I take responsibility for that.”
The tech sector has had to confront consumers who have returned to their offline lives after the sudden shift to online services. In the past year, the industry has been hit hard by rising interest rates and a looming recession as well as businesses rethinking expenses.
Dan Ives, an analyst at Wedbush Securities, wrote in investor note Wednesday that the cloud-computing giant “clearly is seeing headwinds in the field and thus is trying to quickly adjust to a softening demand environment.” The company built its organization over the past few years along with the rest of the tech sector according to the analyst.
It was the same story last year forSalesforce’s stock. At the end of January, the C-Suite will have a new co-CEO and Vice Chair, who will step down from his roles at the company.
Benioff: Friends, Family, and Support for the U.S. Employees that are Going Through a Critical Time in Post-Obligarchic Times
In his letter, he said that impacted employees in the U.S. will get a minimum of nearly five months of pay, health insurance, career resources and other benefits to help with their transition. Those who are outside the U.S. will receive a similar level of support.
The employees being affected are more than just colleagues, according to Benioff. “They’re friends. They are a family. Please reach out to them. They and their families deserve and need more compassion and love than ever before, so offer it. Please lean on your leadership including me as we work through this difficult time together.