Social media and internet companies experienced an unprecedented boom during the pandemic and the consequent lockdowns. In 2020 and 2021 combined, Meta hired more than 27,000 new workers, and they now witness a reduction in force even after some macroeconomic stability has returned.
According to sources familiar with the situation revealed by a news publishing house on November 6, thousands of employees may be impacted. This week, it noted that Meta is likely to make a formal statement. Apparently, Meta employees have already been instructed to postpone any unnecessary trips.
As of September, the company reportedly employed approximately 87,000 people. However, Meta CEO, Mark Zuckerberg disclosed during the company’s third-quarter results that the majority of the company’s teams will “remain flat or decline over the next year.”
For Meta, the earnings announcement was disappointing, revealing an awful 52% decline in net profits, from $9.2 billion last year to $4.4 billion this year. Particularly at Reality Labs, the company’s Metaverse unit, expenses skyrocketed. For the period, the company’s virtual and augmented reality initiatives reported an operational loss of $3.7 billion.
According to Todayq, the response to Meta’s virtual reality realm Horizon Worlds has been underwhelming. Over the course of the year, the number of users significantly decreased, dropping to less than 200,000. Despite this, Zuckerberg still believes that his company will rule the virtual reality market over the coming ten years.
The concept attracted particular attention when various executives were asked to describe it at the WSJ Tech Live conference. It was described as “a poorly made video game” by one of them, Phil Spencer, CEO of Microsoft Gaming. In contrast, Spencer asserted in the latter part of his speech that it is still too early to make any concrete conclusions from the Metaverse, even if he had compared it to a mediocre video game.
Zuckerberg received a lot of backlash after posting a screenshot of his avatar in front of the Eiffel Tower in August. He also became a target of jokes and memes.
Insider accusations and embarrassing internal document spills have further damaged the company’s image. The company’s history of protecting and respecting customer data are being questioned by users and critics.
It is not surprising that the opposition to Meta’s attempt to dominate the Metaverse is growing just like it is with social media and the costs of the business.