The tech layoffs keep coming, with Meta planning a fresh round of job cuts, as it continues to rationalize costs, and combat lower ad intake.
According to Bloomberg, Meta will cut thousands of employees, as soon as this week. This comes on the back of Meta culling 11,000 roles in November last year, as a result of the broader economic downturn, and the impact of various industry shifts.
Apple’s iOS data privacy update (ATT) had been tagged as a key reason for Meta’s initial job cuts, with many users opting out of data tracking in Meta’s apps, impacting its capacity to effectively target ads. Last year, Meta estimated that Apple’s ATT update alone would cost the company over $10 billion in lost ad revenue in 2022.
Since then, however, Meta’s automated ad targeting systems have improved, and it posted a much more positive outlook for its ad business in its Q4 results last month.
But the metaverse is evidently not catching on as Meta had hoped.
As symbolized by its corporate name change, Zuck and Co. have gone all-in on the concept of the metaverse, being a digital alternate reality of sorts, which will eventually incorporate VR, AR and everything in-between. But thus far, users and Meta investors have been far less enamored by the concept, which has played a part in this new push to reduce costs, complexity and middle management throughout the organization.
Zuckerberg also flagged this in the company’s Q4 update, where he discussed ‘flattening’ the company’s organizational structure, and reducing layers of management. As a result, some roles will no longer be needed, while Meta’s also re-shuffling its priorities to focus more on AI and developing generative AI elements, as opposed to focusing all of its energy on VR and AR development.
Those will continue to be a key target, but an internal re-think will clearly make this new AI push a bigger focus, as Meta looks to latch onto the latest tech trend.
Zuckerberg detailed this plan last week, saying that Meta will be ‘creating a new top-level product group’ focused on generative AI.
“In the short term, we’ll focus on building creative and expressive tools. Over the longer term, we’ll focus on developing AI personas that can help people in a variety of ways. We’re exploring experiences with text (like cat in WhatsApp and Messenger), with images (like creative Instagram filters and ad formats), and with video and multi-modal experiences.”
It seems that, within that, Meta has also found some new efficiencies, which will enable it to reduce costs, and regain some of the faith that it’s lost with its investors.
Meta’s also still dealing with declining interest in eCommerce, which has also resulted in Meta having to abandon several key projects. Last month, Meta announced the removal of live shopping elements on Instagram, which had, at one time, been seen as a key growth area, with many experts predicting that the pandemic would lead to a bigger online shopping boom.
That didn’t happen, and as a result, Meta has already cut various roles related to its shopping tools.
That’s likely another element in this new cull, as Meta works to streamline its organization, and optimize its processes.
It’s a time of reflection for the company, which is on the cusp of its next phase. AI will now seemingly play a bigger part in this, but the metaverse still remains its big bet.
Will these cuts result in a slowdown in development of the metaverse concept, and change the trajectory of Meta in general?
We’ll have to wait and see what comes next.