The company is nearing a saturation point of roughly 3 billion daily active users on its apps, with growth slowing significantly over the past two years. Meta’s core business-ads on Facebook and Instagram-appears to have peaked. As a result, Meta’s third-quarter revenue fell 4% year over year, to $27.7 billion, and its net income tanked 52% year over year, dropping to $4.4 billion.Įrgo, Meta should cut back its Reality Labs spending. Meanwhile, Meta’s Facebook and Instagram apps are struggling to produce solid revenue growth amid fierce advertising headwinds and mounting competition from TikTok. Meta is on track to lose roughly $13 billion this year on its Reality Labs division, which encompasses the company’s virtual reality, augmented reality, and metaverse units. The case against Zuckerberg’s stance is simple and coherent. Zuckerberg’s refusal to retreat prompted a massive selloff of Meta stock-shares sank 22% in midday trading Thursday, wiping out more than $75 billion in market cap-and delighted the Twitter chattering class that takes pleasure in his financial pain. Meta defiantly swatted away mounting calls to scale back the company’s metaverse-related investments, which led to an astounding $3.7 billion third-quarter operating loss on just $285 million in revenue for the unit. CNN Sans ™ & © 2016 Cable News Network.The self-styled captain of the S.S. Market holidays and trading hours provided by Copp Clark Limited. All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. ![]() ![]() US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account The employee called the cuts a “shock to the system.” “Finding work you care about and believe in and the right people to be in the trenches with is an incredible dream it also makes moments like this incredibly difficult,” one employee affected by Wednesday’s layoffs said in a LinkedIn post. Zuckerberg said on an earnings call with analysts last month that when Meta started its “efficiency work” late last year, “our business wasn’t performing as well as I wanted, but now we’re increasingly doing this work from a position of strength.”īut left in its wake are the thousands of employees affected by layoffs. Still, profits declined by nearly a quarter compared to the same period in the prior year, and price per advertisement - an indicator of the health of the company’s core digital ad business - also decreased by 17% from the year prior. Meta’s stock jumped last month after the company posted a 3% year-over-year revenue increase for the first three months of 2023, reversing a trend of three consecutive quarters of revenue declines. The turnaround strategy is showing early signs of success. Zuckerberg has also taken responsibility for over-hiring earlier in the pandemic, when there was strong demand for the company’s products and online advertising, which dropped off somewhat once the world reopened. Meta has said the layoffs are part of its “year of efficiency,” as the company attempts to recover from repeated revenue declines, heightened competition, concerns about user growth and big losses in its Reality Labs division amid its pivot to building the so-called metaverse. With the 11,000 job cuts announced in November and the 10,000 announced in March, Meta’s headcount will fall to around 66,000 - a total reduction of about 25% - assuming no additional hiring. In September, Meta reported a headcount of 87,314, per a securities filing. The company said in November that it was eliminating approximately 13% of its workforce, or 11,000 jobs, in the single largest round of cuts in its history. The 10,000 job reductions mark the second significant wave of layoffs at Meta in recent months. Meta stock jumps after company reports first revenue growth in nearly a year Meta (formerly Facebook) corporate headquarters is seen in Menlo Park, California on November 9, 2022.
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