Tag: #meta

Meta, which owns Facebook, Instagram and WhatsApp, has announced plans to cut 10,000 jobs.

It will be the second wave of mass redundancies from the tech giant, which laid off 11,000 employees last November.

Meta chief executive Mark Zuckerberg said the cuts – part of a “year of efficiency” – would be “tough”.

In addition to the 10,000 jobs cut, 5,000 vacancies at the firm will be left unfilled, he told staff.

In a memo, Mr Zuckerberg told employees he believed the company had suffered “a humbling wake-up call” in 2022 when it experienced a dramatic slowdown in revenue.

Meta previously announced that in the three months to December 2022, earnings were down 4% year-on-year – though it still managed to make a profit of more than $23bn over the course of 2022.

Mr Zuckerberg cited higher interest rates in the US, global geopolitical instability and increased regulation as some of the factors affecting Meta, and contributing to the slowdown.

“I think we should prepare ourselves for the possibility that this new economic reality will continue for many years,” he said.

The latest job cuts come as companies, including Google and Amazon, have been grappling with how to balance cost-cutting measures with the need to remain competitive.

At the start of this year, Amazon announced it planned to close more than 18,000 jobs because of “the uncertain economy” and rapid hiring during the pandemic, while Google’s parent company Alphabet made 12,000 cuts.

According to layoffs.fyi, which tracks job losses in the tech sector, there have been more than 128,000 job cuts in the tech industry so far in 2023.

Mr Zuckerberg said the recruitment team would be the first to be told whether they were affected by the cuts, and would find out on Wednesday.

He also outlined when other teams would be informed: “We expect to announce restructurings and lay-offs in our tech groups in late April 2023, and then our business groups in late May 2023,” he wrote in the memo to staff on Tuesday.

“In a small number of cases, it may take through to the end of the year to complete these changes.

“Our timelines for international teams will also look different, and local leaders will follow up with more details.”

Sadly, we’re getting used to hearing about big tech lay-offs, as the giants of the sector continue to tighten their belts.

Many like Meta make most of their money from advertising. Now they’re faced with a perfect storm: of falling ad revenues from companies with their own bills to pay, and a user base which has less money to spend, making existing ad space less valuable.

It’s interesting to note that Meta is looking to its recruitment team in the latest round of cuts.

I often hear that Silicon Valley firms have a tendency to over-recruit, for two reasons. Firstly, so they have staff ready to handle sudden growth, which can happen (just look at TikTok). And, secondly, to retain those people perceived to be “top tech talent”, whom they don’t want working for their rivals.

Both are luxuries, it seems, that are no longer affordable.

Meta has the added risk of Mark Zuckerberg’s enormous gamble on the metaverse being The Next Big Thing. If he’s right, his firm will regain its crown, but if he’s wrong, the $15bn+ dollars he has spent on it so far could disappear in a puff of mixed reality smoke.

Mr Zuckerberg said there would be no new hires until the restructuring was complete, adding that he aimed to make the company “flatter” by “removing multiple layers of management”.

He also dedicated a section of his correspondence to hybrid work. His claims that software engineers who joined Meta in person performed better than those who joined remotely, suggest hybrid working will come under scrutiny during the current “year of efficiency”.

“Engineers earlier in their career perform better on average when they work in person with teammates at least three days a week,” wrote Mr Zuckerberg.

“We’re focusing on understanding this further, and finding ways to make sure people build the necessary connections to work effectively.

“In the meantime, I encourage all of you to find more opportunities to work with your colleagues in person.”

Facebook owner Meta has agreed to pay $725m (£600m) to settle legal action over a data breach linked to political consultancy Cambridge Analytica.

The long-running dispute accused the social media giant of allowing third parties, including the British firm, to access Facebook users’ personal data.

The proposed sum is the largest in a US data privacy class action, lawyers say.

Meta, which did not admit wrongdoing, said it had “revamped” its approach to privacy over the past three years.

In a statement, the company said settling was “in the best interest of our community and shareholders”.

“We look forward to continuing to build services people love and trust with privacy at the forefront.”

Tech author James Ball told the BBC it was “not a surprise” that Meta has had to agree to a serious pay-out but that it was “not that much” money to the tech giant.

“It’s less than a tenth of what it spent on its efforts to create ‘the metaverse’ last year alone,” he said.

“So Meta probably won’t be too unhappy with this deal, but it does stand as a warning to social media companies that mistakes can prove very costly indeed.”

The suggested settlement, which was disclosed in a court filing late on Thursday, is subject to the approval of a federal judge in San Francisco.

“This historic settlement will provide meaningful relief to the class in this complex and novel privacy case,” lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a statement.

The complaint was filed on behalf of a large proposed class of Facebook users, whose personal data on the social network was released to third parties without their consent.

The class size is “in the range of 250-280 million” people, according to the ruling document, representing all Facebook users in the US during the “class period” which runs from 24 May, 2007 to 22 December, 2022.

It is not clear how the plaintiffs would claim their share of the settlement.

Janis Wong, a privacy and ethics researcher at The Alan Turing Institute, said it would only amount to two or three dollars per person if each individual decided to make a claim.

A further hearing on the settlement is due to take place on 2 March, 2023.

“Even though this $725m settlement doesn’t cover UK users, earlier this year a competition law expert put forward a multi-billion dollar class action suit against Meta regarding users’ data exploitation that does cover the Cambridge Analytica period.

“We should hear more about that from the UK Competition Appeal Tribunal in the new year,” she told the BBC.

How the Facebook-Cambridge Analytica data scandal unfolded

The harvesting of Facebook users’ personal information by third-party apps was at the centre of the Cambridge Analytica privacy scandal, exposed in 2018.

The consulting firm, now defunct, worked for Donald Trump’s successful presidential campaign in 2016, and used personal information from millions of US Facebook accounts for the purposes of voter profiling and targeting.

The firm obtained that information without users’ consent from a researcher who had been allowed by Facebook to deploy an app on the platform which harvested data from millions of its users.

Facebook believes the data of up to 87 million people was improperly shared with the political consultancy.

The scandal prompted government investigations into Facebook’s privacy practices, leading to lawsuits and a high-profile US congressional hearing in which Meta boss Mark Zuckerberg was questioned.

In 2019, Facebook agreed to pay $5bn to resolve a Federal Trade Commission probe into its privacy practices.

The tech giant also paid $100 million to settle US Securities and Exchange Commission claims that it misled investors about the misuse of users’ data.

Investigations by state attorneys general are continuing, and the company is challenging a legal action by the attorney general for Washington DC.

year ago, Mark Zuckerberg declared virtual reality the next frontier to drive Facebook’s growth. But so far, there has been very little of it.

The company’s share price has plunged, revenues are falling and profits are on the decline.

The picture worsened on Wednesday, after the company, now named Meta, updated investors on three months ended in September.

Sales shrank 4% compared to a year ago to $27.7bn, while profits halved.

The company, which also owns Instagram and WhatsApp, is struggling as companies cut advertising budgets in the face of economic uncertainty, changes to Apple’s privacy settings undercuts its targeted ads, and competition from rivals such as TikTok heats up.

Mr Zuckerberg, who founded Facebook at university almost two decades ago, acknowledged the firm faced “near-term challenges”.

He said the company was focused on becoming more efficient and hinted at job cuts, saying the firm may be a “smaller organisation” next year.

“There are a lot of things going on right now in the business and in the world,” he said. “We’re going to resolve each of these things… I think those who are patient and invest with us will end up being rewarded.”

Investor confidence plunged in February, when the company revealed it had lost daily users for the first time ever. Then in July, the company reported its first quarterly decline in revenue, as companies spooked by the economic outlook cut their advertising budgets.

Shares in the firm are trading roughly 60% lower than they were at the start of the year, wiping hundreds of billions off the company’s value.

They slid a further 15% in after-hours trade, as executives warned that improvement would take an improvement in the wider economy.

Analyst Debra Aho Williamson of Insider Intelligence said the company was on “shaky legs when it comes to the current state of its business”.

“Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today: Meta is under incredible pressure”.

Meta continues to generate large profits – nearly $4.4bn in the three months ended in September – and it has also fended off a decline in users.

The company said 2.93 billion people were active on one of its platforms daily in the three months ended in September, up from 2.88 billion in the quarter before.

Although the core Facebook platform is not adding users in the US or Europe, it continues to grow in other parts of the world.

Despite its strengths, many investors fear the company has lost its way.

“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes,” investor Brad Gerstner, chief executive at Altimeter Capital, told the firm in an open letter this week, which called on the company to cut staff and scale back its investments in artificial intelligence and virtual reality, also known as the metaverse.

Facebook’s expenses have ramped up in recent years, as it faced questions about how it was handling the spread of misinformation on its platform and protecting user privacy.

The company said it was “making significant changes across the board to operate more efficiently” and planned to hold headcount flat over the next year.

That would be a major shift after payrolls surged from about 17,000 at the end of 2016 to more than 87,000, rising 28% just in the last year.

But it warned that losses in its Reality Labs unit, which works on virtual reality and has seen revenues drop significantly, were likely to grow.

Mr Zuckerberg said he remains committed to the project, despite the sceptics.

“I get that a lot of people might disagree with this investment but from what I can tell I think this is going to be a very important thing,” he said.