The business of tech companies grew rapidly during the pandemic and its impact was also seen on their valuations. The valuations of these companies have come down significantly this year due to increase in inflation and interest rates. Meta’s Chief Executive Officer, Mark Zuckerberg, in a message to employees Told, “Weak macro economic conditions, increased competition and reduction in advertising have resulted in our revenue being much lower than expected. I made a mistake and I take responsibility for it.” He said the company needs to focus its resources on areas with high potential for growth, such as AI, advertising and the Metaverse project.
The laid off staff will be given 16 weeks base pay plus two additional weeks base pay for each year of service. Apart from this, the company will also pay for six months of healthcare cost. meta Ltd. said that along with reducing non-essential expenditure, it is also planning to stop hiring till the first quarter of next year.
Meta had seen steady growth over the years, but earlier this year it saw a decline in daily users for the first time. This is the first time since the inception of the company that such a large number of staff are being laid off. Zuckerberg told analysts, “These are difficult times and I expect to do more with fewer resources.” Due to the economic slowdown, the business of big tech companies has been affected. Because of this, the marketing budget is also being reduced. Amazon, one of the big e-commerce companies, had also announced to reduce the workforce this year. Zuckerberg has been hit hard by the company’s rebranding and increased focus on the metaverse. This year his wealth has reduced by almost half.
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