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In a recent downturn that Meta Platform Inc., Facebook's parent company, is blaming on external factors like the slowing global economy, Facebook will begin initiating massive layoffs of up to 12,000 underperforming employees as early as Wednesday.
While inflation has been rising and the global economy has been struggling for several months, poor leadership and bad policies appear to be more to blame for the company's recent misfortune than the "external factors" cited by Meta leadership.
Meta has forecasted a feeble fourth quarter this year and has already seen a 73 percent drop in its shares over the past year. Its investors are also growing more concerned about the massive spending that has been put towards building the Metaverse - a digital world that utilizes augmented and virtual reality to make it seem more realistic; the idea is that people can socialize from their homes in a virtual world instead of gathering together physically.
Meta CEO, Mark Zuckerberg, gave some indication of the company's direction when he reported on the last earnings call in late October saying, "In 2023, we're going to focus our investments on a small number of high-priority growth areas. So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year. In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today."
After losing half a trillion in stock market value this year and being forecast to lose an additional $67 billion in value next year, Meta's shareholder, Altimeter Captial Management, sent an open letter to Zuckerberg saying, "Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world." The letter went on to say, "In short, Meta needs to get fit and focused."
Zuckerberg has continued to allocate $36 billion towards building the Metaverse even though it lost $5 billion in the first 6 months of 2022 and has fallen well short of Zuckerberg's goal of having 500,000 users of Meta's virtual reality platform, Horizon Worlds, by the end of 2022. Currently, the platform has less than 200,000 users, most of whom are not repeat users.
In an effort to cut back, Zuckerberg announced in June that Meta intended to cut its hiring of engineers by 30 percent and also that the company would be instituting hiring freezes and would stop work on planned projects. While Meta seems late to respond to recent financial woes, it's not the only large company cutting back. Microsoft, Twitter, and Snap have all cut back on hiring as well, with Elon Musk instituting mass layoffs as part of his recent purchase of Twitter.
While the slowing of the global economy is partially responsible for Facebook and Meta's recent downturn, much of the company's distress has been directly caused by its mass censorship of users who violate the opinions of its leadership.
Among its plethora of shortcomings, Facebook has censored everything from German posts regarding anti-immigrant speech, which it equates to hate speech, to posts regarding Covid-19 and vaccination mandates, which it has dubbed "misinformation." Facebook has also ostracized numerous conservative users by removing all conservative news from its trending bar.
While it's easy for Meta and Facebook to point the blame for their recent fall on the economy or competitors like Tik-Tok or Apple, it is clear, with its numerous whistleblowers and drastically declining following, that poor leadership and policies that discriminate against people of differing views, and that support the elimination of free speech, are at the heart of the layoffs that will affect thousands of dedicated employees.
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