Meta lays off more than 11,000 employees

Facebook's Meta Group is laying off more than 11,000 employees - about 13 percent of its workforce - in the largest job cuts in its history.

There were already at the beginning of the week first reportsIt's official: Facebook's Meta Group is laying off more than 11,000 employees in the largest job cuts in its history. That's about 13 percent of the workforce, Group CEO Mark Zuckerberg announced. He pointed out that he had overestimated the online boom at the beginning of the Corona pandemic and had therefore increased investments. Now, however, the online business has returned to earlier trends - and in addition, the weakening economy and increased competition are weighing on revenues. He takes responsibility for the decisions and their consequences.

Concentration on fewer areas

Meta has the problem that its core business with advertising in online services such as Facebook and Instagram is generating less revenue than before. At the same time, the development of virtual worlds driven by founder and CEO Mark Zuckerberg under the catchphrase Metaverse is gobbling up more and more money. Zuckerberg had already announced recently that the number of employees at Meta could no longer grow for the time being and could also shrink in the coming year because the group would concentrate on fewer areas.

In the last quarter alone, the Reality Labs division, which is working on the Metaverse, posted an operating loss of nearly $3.7 billion. Since the beginning of the year, a deficit of $9.4 billion has accumulated - on revenue of $1.4 billion in the division. And Zuckerberg announced that Reality Labs' losses would "grow significantly" in the coming year.

The decline in sales accelerated. Meta is seeing itself hit by the thriftiness of advertisers, who are spending less money on online ads in the face of high inflation and concerns about the economy. Meta's revenues fell four percent year over year to $27.7 billion. Bottom line profits slumped 52 percent to around $4.4 billion. The stock price has been under pressure for months as investors find Metaverse's investments too high. (sda)

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