And if an employer annoys their staff enough, they might prefer suing over settlement.” But there is still reputational cost to handling job cuts in a cack-handed manner. “Many of these organisations will offer exit packages to redundant employees in exchange for a settlement of potential claims, which can make alleged flaws in the consultation process somewhat academic. “The Twitter scandal has lowered the bar so far that now it will be easy for Meta and other employers to make their redundancy processes look sophisticated and humane,” said Charlie Thomson, an employment law expert at Stewarts. Musk’s aggressive job losses were almost immediately hit with accusations of breaches of employment law, for insufficient notice and a failure to ensure that the axe was wielded equitably. The scale of the redundancies is massive but is proportionally far lower than the chaotic dismissals at Twitter, where Elon Musk led a company-wide effort to cut 50% of the workforce in a matter of weeks. “At the same time Meta funds are being poured down into the dark plumbing of the metaverse, and it’s highly unclear when revenues will emerge from this expensive venture.” Streeter noted that the focus for Meta will be to claw back revenue – a “monumental task” – with younger users “dancing to the Pied Piper tunes of TikTok, or setting up groups and channels on Discord and Telegram”. We use Google reCaptcha to protect our website and the Google Privacy Policy and Terms of Service apply. For more information see our Privacy Policy. Privacy Notice: Newsletters may contain info about charities, online ads, and content funded by outside parties. “Mark Zuckerberg’s ‘mea culpa’ statement is unlikely to do the trick of reassuring investors, instead they may be further rattled by his admission he overestimated the company’s prospects,” said investment analyst Susannah Streeter at Hargreaves Lansdown. Meta has struggled as investors resisted Zuckerberg’s expensive dive into creating an immersive AI metaverse just as digital advertising – the company’s main engine of revenue – slowed. It now sits at under $100, its lowest level since early 2016.
However, in the following months there was one bruising revelation after another, from quarterly earnings reports that demonstrated the immediate harm of the change, to a damaging set of leaks from the whistleblower Frances Haugen, and the company’s largest global outage in years.Įven its October 2021 rebranding, from Facebook to Meta, could not stop the downward trend, and the company experienced its largest stock price drop in January this year, plummeting more than a third in less than four weeks. Meta’s share price peaked in September 2021 at $379, shortly after the Apple system rolled out to all iPhone users.
Instead, Zuckerberg explicitly pointed a finger at Apple’s privacy changes, saying the loss of data was one of the factors depressing Meta’s revenue. Those on immigrant visas would receive help from “dedicated immigration specialists” but Zuckerberg acknowledged that the cuts were “especially difficult if you’re here on a visa”.ĭespite widespread criticism of Zuckerberg for the scale of his investment on the company’s virtual reality project, which has resulted in more than $10bn (£8.7bn) being spent on research and development each quarter, he insisted in the note that the pivot remained a “high-priority growth area”, alongside the company’s TikTok-style “AI discovery engine” and its ads and business platforms. The company is offering US employees severance pay starting at 16 weeks, Zuckerberg’s note said, as well as six months of healthcare support. That loss, Zuckerberg has regularly said, made it harder for small businesses to use Facebook adverts to profitably acquire new customers. The reference to “signal loss” is thought to relate to Zuckerberg’s long-running dispute with Apple, which in 2021 limited the amount of data, or “signals”, Facebook could gather about the behaviour of iPhone users. I got this wrong, and I take responsibility for that.” “Not only has online commerce returned to prior trends but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. “Unfortunately, this did not play out the way I expected,” he said. In the note on Wednesday, Zuckerberg said Meta had overinvested at the start of Covid, banking that the increase in online activity would continue and accelerate even after the coronavirus pandemic ended. The first round of redundancies in the company’s history comes after its workforce peaked this year at 87,314.
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