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Meta says ‘no good way’ to lay off amidst latest downsizing

California, USA Facebook’s parent company Meta has recently broken the disheartening news that it’s now joining the slew of tech companies that have decided to downsize. In a message by CEO Mark Zuckerberg disclosed by Meta on its website, the chief said, “there is no good way to do a layoff.”  

Meta has decided to reduce its workforce by 13% or translate into a retrenchment of more than 11,000 employees. It is one of the largest layoffs this year for the company, and the firm cites low revenue, attributed to  ‘macroeconomic downturn’ and ‘increased competition’ as the reasons.

According to the company, when Covid initially started, the spike in online and e-commerce led to outsized revenue growth. Meta is one of the companies that predicted a permanent acceleration that would last even after the pandemic, which is not what exactly transpired. Meta said it significantly increased its investments, resulting in much lower revenue than expected once everything returned to normal.

This is the first time in Meta’s 18-year history that it has reduced its workforce. 

“I’m going to watch our business performance, operational efficiency, and other macroeconomic factors to determine whether and how much we should resume hiring at that point. This will give us the ability to control our cost structure in the event of a continued economic downturn. It will also put us on a path to achieve a more efficient cost structure than we outlined to investors recently,” said Zuckerberg. 

He added, “I view layoffs as a last resort, so we decided to rein in other sources of cost before letting teammates go. Overall, this will add up to a meaningful cultural shift in how we operate. For example, as we shrink our real estate footprint, we’re transitioning to desk sharing for people who already spend most of their time outside the office. We’ll roll out more cost-cutting changes like this in the coming months. “

The company stated that it will share more information in the coming weeks about how it will operate as a streamlined organisation to achieve its priorities.

Recently, Big Tech Companies have struggled to deal with setbacks, with other tech firms cutting off staff count such as Oracle, Twitter, Snap, and Netflix

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Marketing Featured Global

Netflix lays off 300 staffers amidst falling revenue growth

United States – Global streaming giant Netflix has announced its second wave of layoffs amidst its weak performance this year. This new wave of layoffs included 300 staffers–the majority of which are from the US and the rest are from other countries.

Netflix had already laid off around 150 employees in May after reporting the platform lost around 200,000 subscribers in its most recent quarter.

“While we continue to invest significantly in the business, we made these adjustments so that our costs are growing in line with our slower revenue growth,” Netflix told Reuters in an exclusive statement.

In another report from Reuters, Netflix said that they are now in talks with several companies for advertising partnerships, including reportedly with Alphabet Inc., the parent company of Google; and with Comcast Corp.’s NBCUniversal for marketing tie-ups.

“We’re not adding ads to Netflix as you know it today. We’re adding an ad tier for folks who say ‘hey, I want a lower price and I’ll watch ads’,” Ted Sarandos, co-CEO at Netflix, said during the recently-concluded Cannes Lions 2022.

Netflix’s move into ad-supported subscription stems from their first quarter 2022 earnings call in April this year, where they reported the company’s slow growth.

“Our revenue growth has slowed considerably as our results and forecast [show]. Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds,” the company said in its letter to shareholders.

During the earnings call, Wilmot Reed Hastings, co-CEO at Netflix revealed that one way to increase the price spread is advertising on low-end plans and to have lower prices with advertising. This is despite his reluctance to deal with advertising complexities.

“I’m a bigger fan of consumer choice. And allowing consumers who would like to have a lower price and are advertising-tolerant get what they want makes a lot of sense. So that’s something we’re looking at now,” Hastings said.