Thousands of workers were laid off this week as tech companies and startups brace for an economic crash. Investors, founders, and recruiters explain why this is just the beginning.
Business InsiderNov 05, 2022
Following a second straight quarter of revenue loss and a 70% loss in stock value on the year, Facebook parent company Meta is reportedly planning to lay off thousands of employees in what's expected to be the largest mass layoffs to hit the tech sector.
Meta reported 87k employees in September, having hired a combined 27k in 2020 and 2021 due to the pandemic-induced shift to online life, and another more than 15k so far this year.
This is the unfortunate reality for the tech industry when the economy takes a downturn. With inflation and interest rates up, investment and revenue are down, which means companies need to cut off some of the excess expenses, like employees. To keep investors happy, both start-ups and massive platforms like Meta need to ensure they hit certain market goals.
Meta's financial problems aren't only from inflation but also the $9B already lost due to Zuckerberg's obsession with VR goggles and the metaverse. The irony is that while looking to mass-fire employees throughout the company, Zuckerberg doesn't seem to be reining in his metaverse ambitions. Only time will tell, but these layoffs won't do much good if no one wants to join Meta's virtual world.
There's a 23% chance that Meta will report 1B active users by the end of 2031, according to the Metaculus prediction community.