Mark Zuckerberg and Facebook Bring Very Bad News
Meta platform is not doing well. The social media giant, the parent company of Facebook, Instagram and WhatsApp, has been sounding the alarm bells for months.
Social media giant Facebook is facing one of the toughest times in its history.
Dropped from the top 10 most valuable companies in the world, his market capitalization has fallen by nearly $545 billion this year. During the soon to be finished third quarter, the stock fell about 15%, reducing its market cap by $57.5 billion from July to September alone.
Chief Executive Mark Zuckerberg, who warned in late June that we were headed for "one of the worst recessions we've seen in recent history," warned that the meta's near future was in serious trouble. We've made a number of announcements suggesting that we're facing a cover and an impending storm.
Contents:
- Facebook's first downsizing
- Not so bright until 2023
- Recession, Tiktok competition threatens ad revenue
Facebook's first downsizing:
In his traditional weekly session on Meta on Sept. 29, the billionaire updated employees that the company is entering a new era of lackluster growth. Zuckerberg told employees that Meta will cut jobs for the first time since his 2004 founding. It contains several actions. The company freezes hiring, reshuffles some teams, and even cuts budgets for teams in growth divisions.
For example, Zuckerberg told employees that Meta shouldn't replace retirements and early exits with people who are "unsuccessful." According to Bloomberg, Zuckerberg said he "would have liked the economy to be significantly more stable than it has been by now." "But from what we've seen it doesn't look like that yet, so we want to plan a little conservatively."
Boss added that the meta will be "a little smaller" by the end of 2023. "In the company's first 18 years, we basically grew rapidly every year, but for the first time recently, we've seen revenues flat to slightly declining," Zuckerberg added.
Meta declined to comment. A spokeswoman referred to Zuckerberg's statement during a second quarter conference call in July. “Our plan is to steadily reduce staff growth over the next year. Many teams will be downsizing so we can shift our energies to other areas. We wanted to give leaders the ability to make decisions within their teams about where to double down on cutbacks and where to reorganize their teams, while seeing the damage of the period initiative," Zuckerberg said at the time.
According to regulatory filings, Facebook said he employed 83,553 people as of June 30, a 32% increase from 63,404 as of June 30, 2021.
Not so bright until 2023:
The growth rate is going to be negative this quarter, it was negative last quarter and if we get caught in this economic storm it could be even more extreme.
So there will be very little light until 2023.
“So the first thing that companies cut when there are economic headwinds is the slowdown in advertising. I think the second factor is competition.
“There are very few young people from him 18 to 25 who are still on Facebook. All the while, it has the combined effect of stealing revenue, investing heavily in the metaverse, declining operating margins, and not currently interested in buying technology.
Recession, Tiktok competition threatens ad revenue:
A slowing economy and a possible recession threaten the revenue Meta generates from its basic advertising business on Facebook. But Instagram and WhatsApp owners are also losing market share to competitors.
His TikTok, a short-video platform, has become one of his most popular avenues for advertisers targeting Gen Z and millennials in recent months.
Additionally, Apple's Privacy Policy Amendment (AAPL) prohibits Facebook from tracking your online habits and displaying ads that match your online interaction history.
As for his Metaverse, which Zuckerberg sees as the next big thing for the company, it's not yet clear if it really will be the next big thing. With almost $16 billion invested, it remains a money trap for now.
Reality Labs, the unit that houses Meta's Metaverse plan, reported an operating loss of $2.81 billion in the second quarter. Losses in the first half of the year he reached 5.8 billion US dollars. Across 2021, Reality Labs has suffered his $10.2 billion loss.
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