SUMMARY
Meta cited the current macroeconomic downturn, increased competition and shrinking ad revenues as the reasons for the layoffs
Meta CEO Mark Zuckerberg also announced the extension of the hiring freeze till Q1 2023
The company has around 300-400 employees in India, according to media reports. However, the number is not confirmed
Meta, the parent company of Facebook, Instagram and WhatsApp, has announced that it will be laying off 13% of its employees. The move will impact more than 11,000 employees worldwide. However, the number of employees who will be impacted in India is not clear yet.
The company has around 300-400 employees in India across five offices, according to media reports. However, the number is not confirmed.
It must be noted that earlier Twitter fired almost 90% of its employees in India as part of a global restructuring exercise after the acquisition of the platform by Tesla boss Elon Musk.
“I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go,” Meta CEO Mark Zuckerberg said in a blog post. He also extended the company’s hiring freeze till Q1 2023.
The company had 87,000 employees as of September 2022. Meta’s layoffs come after the company hired 15,344 in the first nine months of 2022, a quarter of which happened during the most recent quarter.
“At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth,” Zuckerberg explained in the blog post. He added that while everyone, including himself, believed that this momentum would grow, it failed to do so.
He cited the current macroeconomic downturn, increased competition and Meta’s shrinking ad revenues as the reasons for the layoffs. “I got this wrong, and I take responsibility for that,” said the CEO.
Meta also announced several benefits for the employees going out. First, the company will be paying 16 weeks of base salary, along with two weeks’ pay for every year of service. It will also provide additional health coverage for six months for the employees and their families, and outplacement and immigration services support for the laid-off employees.
It is prudent to mention that Meta has lost $9.4 Bn on its metaverse technology in 2022 so far. It expects to spend even more on the business in the future, as per the earnings call for the quarter that ended in September.
The company’s revenues declined 4% in Q3 2022 to $27.71 Bn, a third consecutive quarter of decline. Meta’s quarterly net income declined by 52% year-on-year (YoY) to $4.4 Bn from $9.2 Bn in Q3 2021. The company’s expenses also rose 19% to $22.05 Bn, causing its free cash flow to decline 98% in the most recent quarter.
In India, Meta registered a 74% YoY growth in FY22, clocking revenue of INR 16,189 Cr, while profit also surged 132% to INR 297 Cr.
The bad news for Meta does not end there; its stock price has plummeted by more than 70% and has lost $700 Bn in market value over the last year.
Major tech players in the world, have conducted massive layoffs over. Large US companies such as Salesforce, Lyft, Chima, Stripe and Morgan Stanley have laid off employees over the past week or so as global macroeconomic pressures continue to rout tech companies across the world.
