Meta Stock Inches Higher As It Starts Mass Layoffs
Meta, which is the owner of Facebook and several other social media companies, recently saw an increase in its shares. The reason behind this stock is the company's recent announcement that it will start mass layoffs within a few days.
So although it would mean job loss for a lot of the workers, it seems that the investors are happy that the company is sorting out its financials.
Thousands of Affected Employees
A headcount reduction of this scale is the first such event in the history of Meta (formerly Facebook). Experts believe that once fully carried out, this plan will affect thousands of Meta employees. By the end of September, around 87,000 people were working for the company - Once the company has finished its mass layoff program, only then will we be able to see the exact scale of this action.
If we look at the recent comments made by CEO Mark Zuckerberg, he stated that the company would focus its investments on a select few high-growth areas. What this really means is that some teams at Meta will continue to grow while others will remain flat or even experience downsizing over the next year.
So by the end of 2023, it means that the headcount at the company will be around the same size. The reason is that some areas will experience growth while others will experience less investment and go through downsizing.
Just this year, Meta stock is already down by 72%, and the company is heavily invested in building its futuristic metaverse. Recent data shows that Meta's market cap is now even lower than $260 billion, which is a small figure considering the historical growth and market cap of the company.
Looking back, tech companies such as Meta had only experienced growth and, as such, continued to increase their headcount numbers. But it seems that times have changed, and the economic conditions are forcing companies like Meta to downsize rather than grow.