Out Of The Metaverse

Image source: Meta

What's going on?

Meta announced the biggest staff cut in the companys history on Wednesday.

What does this mean?

Meta’s dismal report from last monthrevealed its second-straight quarterly drop in revenue and piling losses from its risky metaverse bet. Investors dropped Meta like a hot potato, wiping more than $89 billion from the firms already shriveling market value. And given theres very little chance that fired-up competitors will take a breather, or that budget-conscious clients will ramp up their ad spending, that downward trend could stick around. But Zuckerberg has a plan: Meta announced on Wednesday that it was laying off 11,000 employees about 13% of its workforce in the biggest cull in the companys history. Other cost-saving measures are on the cards too, with budgets, perks, and even whole offices on the chopping block. But that bad news for staff could be good news for profit, which might be why investors sent its shares up 3% after the news.

Why should I care?

Zooming in: The great leveler.
The last few months have shown that no ones immune to the effects of the global economic slowdown, not least tech companies that are rushing to cut staff to save cash. Case in point: Salesforce announced a plan to cut jobs this week, while Apple, Amazon, and Alphabet have all slowed or paused their own hiring too. At least Twitters demonstrated what not to do: the firm laid off around half of its workforce last week after Musk took the helm, but has already started pleading for some of them to come back (tweet this).

The bigger picture: Tik, tok, boom.
TikToks often seen as Metas main rival in the battle for the worlds attention, which likely inspired Meta to create Reels a format similar to TikToks bite-sized videos. But right now it looks like even TikToks feeling the burn, with its parent company ByteDance cutting a chunky $2 billion from this years ad revenue targets on Wednesday.

Originally posted as part of the Finimize daily email.

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