Facebook's parent company lays off over 11,000 workers

The New York Times reports that Meta, the parent company of Facebook, Instagram and WhatsApp, has decided to reduce its workforce by 13% and freeze new hiring.

2022 has been especially rough for the trillion-dollar corporation founded by Mark Zuckerberg, with quarterly profits dropping 50% and stocks dropping in value by more than 70%.

Meta is hardly the only tech behemoth currently going through a critical time. Elon Musk, the new owner of Twitter, had to lay off half of the company's employees.

With Zuckerberg's company, it seems like a mix of the failure of the Metaverse to catch on and increased scrutiny on data privacy affecting Meta's ad revenue.

Things were looking better for Facebook's parent company at the beginning of 2022 after going through a rough patch. Meta reported an increase in revenues, users, and stock value during its first quarter of 2022 that exceeded the forecast of experts, according to Al Jazeera.

Shares of the company trading on Wall Street surpassed 15 percent. The stock value reached 2,72 US dollars per share, as Al Jazeera highlighted at the time.

In total, Forbes reported, the parent company of Facebook and Instagram, had a profit of 7.4 billion US dollars. However, this was still a drop of 21% from one year ago, during the first quarter of 2021.

After all, Meta suffered in early February its biggest one-day loss on Wall Street. The company’s worth plummeted by over 26%, which is about 230 billion US dollars.

To put that in perspective, 230 billion US dollars is roughly the entire GDP of Portugal. It’s the biggest loss of value for a single US conglomerate in the history of Wall Street.

At the same time, the company was threatening to pull Facebook and Instagram from the European Union over data regulations.

The reason? Privacy. Meta’s annual report paints a troubling picture of the company that Mark Zuckerberg founded.

According to Investopedia, 97% of Meta revenues comes from advertising, which they manage to sell by targeting very focused demographic groups. The more they know about you, the more profit can be made.

Facebook also stated in February that it was losing users globally for the first time since its creation. The social network has issues attracting younger generations.

Meanwhile, according to Bloomberg, an ongoing dispute with EU regulators puts at risk the chance to continue transferring data back to the United States.

“The simple reality is that Meta relies on data transfers between the EU and the US in order to operate global services,” a company spokesman was quoted by Bloomberg.

“Digital giants must understand that the European continent will resist and affirm its sovereignty,” declared at the time French Minister of Finances Bruno Le Maire.

In 2021, Mark Zuckerberg revealed that his company rebranded itself as Meta. It was a promise of a revolution for the social network.

The concept of Meta was built around the idea of a Metaverse, a virtual reality that would redefine online social interactions as we know them. So far, the project has a cost of over 10 billion US dollars.

The Metaverse, as promised by Mark Zuckerberg, seemed like a fantasy world fueled by a mixture of real-life technology and our wildest dreams. Something akin to 'Ready Player One'.

Image: Warner Bros.

However, as CNN's Rachel Metz describes it, it's really “a desolate combination of another social VR app, Rec Room, and the pioneering user-created virtual world Second Life.”

Pictured: A Second Life user and her virtual avatar.

Maybe the true fantasy is Mark Zuckerberg's, thinking he can leave behind all the scandals related to how his company manages its user data. Particularly when it comes to political goals, such as Brexit and Cambridge Analytica.

However, all these changes seem to have been more out of fear for the present than hope for the future. Very little seem to actually have changed for Mark Zuckerberg's company. Different name, but same service.