For the first time in its nearly 20 year history, Facebook is laying off a significant percentage of its workforce. The company’s woes mirror those being felt throughout the tech sector.
Workforce Woes Tech giant Meta is laying off 13 percent of its workforce across all of its companies: Facebook, Instagram, and WhatsApp, etc. That amounts to around 11,000 jobs — the biggest tech layoff of the year. That’s an especially high number when you remember that since its founding 18 years ago, Facebook has never had to cut back its workforce. Meta CEO Mark Zuckerberg appeared to address the layoffs in a leaked video Wednesday afternoon, saying, “I want to say up front that I take full responsibility for this decision…It was one of the hardest calls I’ve had to make in the 18 years of running the company.” And… the company has signaled investors to expect further bad news in the fourth quarter. This comes after Meta announced a second straight quarter of declining revenue in October. Everywhere you look, big tech is struggling. Last week, Amazon announced that it has put a freeze on hiring for at least a few months because it said the economy was “in an uncertain place.” The rideshare company Lyft is laying off 13 percent of its workforce. They say they’re preparing for a likely recession next year. The payment processing platform, Stripe, is cutting 14 percent of its staff. The company’s CEO said in a memo to employees, “We were much too optimistic about the internet economy's near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown.” And…That’s to say nothing of Elon Musk firing about 50 percent of Twitter employees. Microsoft and Google aren’t cutting yet, but they’ve told investors that new hiring will be minimal and much lower than in past quarters. According to one report, over 21,000 employees have lost jobs across 46 different companies in less than two weeks. The Causes Obviously the pandemic and inflationary spending are affecting all industries, and following the midterm elections, President Biden announced that he has no plans to do anything differently regarding economic policy. But there are also some issues unique to tech. First, many companies like Amazon and Meta had gone on hiring sprees the last two years to keep up with demand from people stuck at home during Covid. Apple’s privacy update on iPhones also hit social media companies hard. Less access to user data limited targeted advertising, so digital ads have been cut back because of that, and that’s compounded by the fact that digital advertising has been cutting back anyway as consumers have reigned in spending as a reaction to inflation.