Meta Announces Layoff of 10,000 Employees, Blames High Interest Rates and Global Political Uncertainty

Meta, the Company Responsible for Managing Facebook, Instagram, and WhatsApp, Announced on Tuesday (14) the Layoff of 10,000 People.

This would be the second wave of layoffs by the tech company, which already laid off 11,000 workers in November 2022. In addition to the 10,000 layoffs, the company has 5,000 positions to fill, according to a note from Meta sent to employees. Mark Zuckerberg, founder and CEO of the company, told employees that he sees “red flags” in 2022 with a decline in revenue.

Meta has already announced that, in the last three months of 2022, revenues dropped 4% compared to the previous year – although the company still managed to record a profit of more than US$ 23 billion for the entire year of 2022.

Meta’s Announcement Comes at the Same Time as Other Tech Companies’ Layoff Measures

The announcement comes at a time when several large tech companies, including Google and Amazon, are struggling to balance cost-cutting measures with the need to remain competitive.

Earlier this year, Amazon announced plans to cut more than 18,000 jobs due to “economic uncertainty” and rapid hiring during the pandemic, while Alphabet, Google’s parent company, cut 12,000 jobs. Twitter and Microsoft also cut thousands of jobs.

Why Are Meta and Other Companies Laying Off?

Zuckerberg pointed to rising interest rates in the U.S., global geopolitical insecurity, and increased regulation as some of the factors affecting targeted companies and contributing to the economic slowdown. Many of these companies – like Meta – have business models based on advertising revenue.

Experts believe that these companies are facing a combination of negative economic factors: companies are spending less on advertising and the user base has less money to spend, making existing advertising space tougher.

Specifically, Meta is doubling down on Mark Zuckerberg’s metaverse bet, which he believes will be the next big frontier. Kleinman analyzed that if he is right, Meta will return to the top of the sector. But if he is wrong, the US$ 15 billion it has spent so far on the bet may be worthless.

Meta Ends Support for NFTs on Instagram and Facebook

After months of working with non-fungible tokens (NFTs), Meta decided to stop supporting digital collectibles on its social network. Stephane Kasriel, head of business and financial technology at Meta, announced the news on his Twitter account.

Meta began testing NFTs with selected Instagram users last May, allowing platform users to showcase their NFTs. Two months later, Mark Zuckerberg’s company expanded NFT support on the social network to creators in 100 countries.

The company’s decision to close support for NFTs comes amid a slowdown in the tech industry overall. NFTs have declined, as have cryptocurrency prices and stocks in intelligence.