Last Updated on 11/11/2022 by てんしょく飯
On Wednesday, November 9, Meta, Inc. of the U.S., which operates the social networking giant Facebook, announced that it will cut 11,000 employees and make a large-scale workforce reduction.
Chief Executive Officer Mark Zuckerberg apparently had a number of reasons behind this decision.
First, he had misjudged the prospects for increased revenues from the spread of the COVID-19 infection.
When the COVID-19 outbreak first began to spread, restrictions on leaving the house forced people to turn to e-commerce, video calling, and online gaming for their livelihood. The company believed that this change would continue even after the restrictions were lifted, and invested heavily as revenues increased.
However, the company’s performance has since declined steadily. When the lockdown was lifted and people resumed face-to-face activities, the company’s revenues shrank. As a result, this led to financial risks.
Second, European countries ended their zero-interest-rate policies. This caused investors to begin prioritizing immediate gains over future growth. The broad “macroeconomic downturn” hit all high-tech stocks hard.
In addition, “increased competition” was another major factor.
Mark Zuckerberg did not name specific competitors, but it was clear that he was referring to TikTok, which is now extremely popular, especially among young people, and Apple’s change of direction.
In 2021, Apple will limit the amount of data Facebook can collect on iPhone users’ behavior. This has made it difficult to generate advertising revenue from small and medium-sized businesses.
The huge investment in the Metaverse business was also seen as a major factor.
This is the first time that Meta has had to make such a large-scale layoff, and Zuckerberg himself stated, “I sincerely apologize to everyone who has been affected by this.
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