The Meta seems to have finally caught the demolishing bug. Now, the question becomes who in the company is feeling the negative effects of the job cuts.
I The Wall Street Journal again New York Times reported Sunday that the parent of Facebook and Instagram will cut 87,300 jobs sometime this week, the company’s first round of mass layoffs since it was founded nearly two decades ago. No other news site has published the exact number of expected job losses, though Journal they said they would mobilize “many thousands of workers.”
For now, the layoff should come as little surprise.
Meta’s chief executive, Mark Zuckerberg, has warned in recent months that his company will need to reduce its costs and inventory, mainly due to the global economic slowdown and slowing growth in ad spending. Zuckerberg may have hoped the cuts would be enough to navigate the recession, but the storms have proven persistent. In late October, Meta reported third-quarter results that showed revenue was down 4% year-on-year and revenue was down 52% compared to 2021. (The social media outfit still raked in $27.7 billion in revenue and $4.4 billion in profit. )
Meta’s fourth-quarter outlook didn’t inspire much confidence, either. The company’s management predicted revenue of $30 billion to $32.5 billion, while analysts expected $32.2 billion, according to CNBC. Speculation of the deficit sent Meta stock up 24% the day after it announced earnings. Shares of Meta were up 5% in mid-day trading Monday on news of the cost cuts, although the company’s stock is down 72% year to date.
While there is little doubt about Meta’s decision to lay off employees, intrigue surrounds Zuckerberg’s distribution of layoffs across departments.
As it is, many investors want to see Zuckerberg take the reins of his Reality Labs division, the unit responsible for the company’s augmented reality, virtual reality, and metaverse games. Zuckerberg has invested heavily in Reality Labs, which is on track to spend $13 billion and generate $2 billion in revenue this year. Research and development spending grew to 33% of Meta’s third-quarter expenses, up from 20% a year ago.
But Zuckerberg’s comments during last month’s earnings call suggest that Reality Labs—which accounts for only 18% of the company’s expenses this year through September—remains a sacred cow. Ditto for Meta’s two other main tasks right now: boosting its AI capabilities to make Instagram and Facebook more competitive with TikTok, and re-establishing its dominance of the ad platform after Apple limited targeted marketing through operating system privacy changes last year.
“The internal indicators that I’ve seen suggest that we’re doing a great job and we’re on the right track with these investments, so I think we should continue to invest more in these areas,” Zuckerberg said.
Investors expecting a surprise appearance will be disappointed. While the decline in Meta’s share price certainly affects employees with stock-based compensation—and thus the company’s ability to attract and retain talent—Zuckerberg is not under the usual pressure of a CEO leading a public company. He still owns a minority of Meta’s voting shares, giving him control over the company’s coffers.
Most likely, Zuckerberg will close ranks in the metaverse, ads, and AI, choosing to reduce spending on businesses that want to further expand the Facebook and Instagram ecosystem.
Already, Meta officials have halted several once-promising projects that reflect the company’s growing ambitions.
In August, Meta executives announced that they would sunset the feature to buy live videos on Facebook, a product that failed to imitate the success of Chinese digital companies that pioneered the trend. A few weeks later, Meta leaders said they were pulling the plug on their independent Facebook Gaming program, which has never come close to competing with Twitch or Apple. Then in October, Meta dropped the ax on its newsletter subscription, Bulletin, in an attempt to compete with Substack.
“In 2023, we will focus our investments on a small number of the most important growth areas. So that means that some groups will grow in a meaningful way, but many other groups will stay low or decrease next year,” said Zuckerberg last month.
Meta probably can’t cut it and is facing thousands of job cuts. After Zuckerberg’s comments last month, however, it’s hard to imagine Zuckerberg straying too far from taking over TikTok and building a metaverse — regardless of what Wall Street thinks.
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By continuing to meditate. Twitter officials he asked a lot of workers to come back at the company after their layoffs on Friday, the latest example of the turmoil surrounding them Elon MuskThe first 10 days are in control of the telecommunications company, Bloomberg reported on Sunday. Sources familiar with the matter told Bloomberg that some employees were terminated in error, while others were quickly deemed too important to let go amid Musk’s demands for immediate changes to the platform. Musk also received heat from other Twitter users for publicizing those impersonated accounts will be permanently suspended unless they’re clearly written as parody—a rule that cuts across Musk’s self-proclaimed free speech absolutism.
Santa better order them now. an apple warned on Sunday that customers you will have to endure long waiting times in iPhone 14 devices due to a COVID-related shutdown that is hampering production at a Chinese assembly plant, Bloomberg reports. Apple officials said the Foxconn-owned facility, which assembles more iPhones than any other plant, is operating at “significantly reduced capacity” following the COVID outbreak at the site. Company officials did not specify the length of the additional delay.
The crypto kerfuffle. The CEOs of two of the world’s largest cryptocurrency exchanges traded barbs on Sunday back-to-back Binance he declared that it would be so remove all of its remaining tokens tied to FTX. Binance CEO announcement Changpeng “CZ” Zhao followed by a leak of the balance sheet showing FTXsister company, The Alameda Study, holds 5.8 billion worth of tokens. Zhao described the liquidation decision as a “risk management” strategy and accused FTX of lobbying industry players, while FFX CEO. Sam Bankman-Fried accused Zhao of spreading “false rumors.”
Big risk. Carvana‘s stock freefall continued on Monday, with investors run away from an online used car dealer amid concerns about its long-term outlook, CNBC reported. Shares of Carvana fell 18% in mid-day trading on Monday, adding to the company’s woes after the stock price fell 39% on Friday. The Arizona-based stock boomed during the crisis due to low borrowing costs and strong demand for used cars, but its stock has fallen 97% year over year following rising interest rates and consumer withdrawals.
FOOD FOR THOUGHT
A little burning sensation. The Biden administration’s efforts to end Chinese technology innovation are already paying off. I Financial Times reported on Sunday that the tech conglomerate Alibaba and semiconductor implementation Biren Technologies have begun to change their chip designs to lower processing speeds, a direct result of new US export controls. The moves by the two Chinese firms follow rules announced last month by US officials, who ruled that chipmakers using American-made hardware or software cannot export high-quality semiconductors to the Republic. All major chip makers outside of China use US-made products, so Chinese companies cannot import advanced semiconductors for data centers, AI-centric computers, and other high-end computer hardware.
From the the subject:
Alibaba, Biren and other Chinese design houses have spent years and millions of dollars designing advanced processors to power the next generation of supercomputers, artificial intelligence algorithms and data centers. These are manufactured overseas by the world’s largest contract manufacturer Taiwan Semiconductor Manufacturing.
But sanctions announced by Washington last month that would block the ability to operate any semiconductor exported to China without a license have challenged their ambitions.
Both Alibaba and Biren had already conducted expensive testing of their latest TSMC chips when Washington unveiled the controls. The rules have forced companies to halt production and make changes to their designs, according to six people briefed on the situation.
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BEFORE YOU GO
Money is also clear. As semi-frequent Airbnb customer, I’m used to the sticker shock when you check out. You see an attractive price advertised on a search tool, then get hit at the last minute with hundreds of dollars in cleaning fees, service fees, and taxes. Thankfully, Airbnb is finally doing something about this crap. The company’s chief executive officer Brian Chesky announced on Monday that users will you have the option to start seeing payments (but not taxes) baked into the costs shown during the hiring search, TechCrunch reports. “I heard you speak loud and clear — you feel like the values aren’t transparent,” Chesky said on Twitter early Monday. An analysis of 1,000 Airbnb listings by NerdWallet found that expenses account for 27% of the total cost of living, with taxes amounting to a fraction of 5%. Airbnb users will still have to adjust to the new price display, which is scheduled to arrive next month.