Facebook owner Meta Platforms Inc. META-Q began laying off 11,000 people worldwide on Wednesday, including in Canada. It became the latest tech giant to cut costs dramatically after years of rapid growth in the industry.
The meta has found itself in a three-way tie this year. It is battling an industry-wide downturn, rocky branding to focus on immersive “metaverse” experiences and a sharp slowdown in digital advertising, which underpins much of its traditional business. Its profit in the last quarter fell by more than half compared to the same period last year, to $4.4 billion, as the average cost per ad on its platforms fell 18 percent.
CEO Mark Zuckerberg said in a message that the layoffs amounted to 13 percent of Meta’s workforce, calling the cuts “a last resort” as the company cut discretionary spending and extended a hiring freeze into the next fiscal year. Like many tech leaders in recent months, including Shopify Inc Chief Executive Tobias Lutke, Mr Zuckerberg admitted he was wrong to project a future in which the pandemic’s frenzied rush to e-commerce would continue.
“I got this wrong,” Mr. Zuckerberg wrote, later adding: “We’re changing Teams to make us more efficient. But these moves alone aren’t driving our expenses to increase our revenue, so I’ve also made the difficult decision to let people go.
The news comes just months after Meta and other massive U.S. tech companies jacked up prices for Canadian tech talent, raising wages by up to 30 per cent a year at tech companies of all sizes across the country. In late March 2022, Meta announced that it would hire an additional 2,500 workers in Canada over five years – many of them remote, although the company also announced a new engineering center in Toronto.
Ontario Premier Doug Ford praised the March job announcement, calling it an opportunity “to show that our tech talent no longer has to look elsewhere to continue their careers.”
Meta, which owns the original Facebook platform, Instagram and WhatsApp, last year embarked on a sweeping, controversial rebrand to focus on immersive 3D experiences to bring people together in what it calls the “metaverse.” According to a LinkedIn analysis, Metal has at least 1,100 employees in Canada.
Meta’s Canadian office declined to say how many Canadians will be affected by Wednesday’s cuts, but scores of Canadian workers began announcing their own layoffs by midday.
Mitchell Steiman, who was hired at Meta in July as a client partner for Facebook and Instagram’s emerging brands, said he was affected by the layoffs. “It was everything I could have hoped for in the role and more. I will miss the people and culture there immensely,” he wrote on LinkedIn on Wednesday from his previous position at Meta, which was based in the Greater Toronto Area.
“On my small team, 9 out of 10 teammates got laid off,” said Lois Wang, a Toronto-based technical recruiter at Meta, who wrote on LinkedIn that she had been there for just under a year before the so-called “huge” layoffs. This particularly affected the company’s recruitment teams.
“In the third quarter of 2022, my performance in the on-site interview placed me second among 37 teammates on the Meta East Coast acquisition team,” he said. “I believe that being optimistic and hopeful is the best way to get through a difficult time like this.”
Across Canada, high-profile companies such as e-commerce platform Shopify Inc. SHOP-T, investment firm Wealthsimple Technologies Inc. and social media management firm Hootsuite Inc. have all laid off hundreds of workers in recent months. Last week, Twitter Inc.’s new owner Elon Musk began cutting 50 percent of the social network’s staff, including scores of Canadians, as he began a sweeping restructuring of the notoriously unprofitable company.
The industry had experienced unbridled growth since the Great Recession led to more than a dozen years of low interest rates, fueling a digital economy based on social platforms and mobile computing. But macro factors such as the COVID-19 pandemic, the war in Ukraine and their dual supply chain constraints have changed global dynamics.
It’s been almost a year since public markets started to turn against the sector, as inflation worries turned into fears of rising interest rates and technology valuations. These fears were reinforced last March when central bankers began raising interest rates. Tech companies big and small started cutting costs — and jobs — as a result.
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