Meta set for change with workforce layoff

Edward Anderson on November 14, 2022

Meta, Facebook’s parent company, plans to begin its first major layoffs to cut its workforce amid a struggling economy.

According to the Wall Street Journal, the company’s move comes as it grapples with declining business and growing fears of a recession.

The news

The significant layoff is expected to affect thousands of employees.

According to the Journal, the layoffs could begin this week, citing anonymous people familiar with the case.

A September SEC filing also shares that Meta has over 87,000 employees.

Earnings result

Last month, Meta held a conference call discussing the third quarter results.

CEO Mark Zuckerberg said he expects Meta to end 2023 with the same size or smaller organization than today.

Revenue

While it’s not certain yet, the potential cuts could be linked to tighter budgets for advertisers.

Additionally, Apple’s iOS privacy changes have affected the company’s core businesses.

Last month, Meta reported a sales decline in the second quarter and reported that profits had halved from 2021.

The drop in profits is caused by the billions the company spent to build the metaverse.

The metaverse is what many suggest is the future of the Internet; however, it is probably years away from operating.

The social media giant had a market cap of over $ 1 trillion in 2021, but it has declined.

Meta is currently worth over $250 billion.

When news of the company’s job cuts surfaced, the company’s shares opened more than 5% higher on Monday morning.

Other companies

Meta isn’t the only company in the tech industry rethinking its workforce.

Many companies in what was once considered an untouchable industry have recently announced staff freezes or job cuts.

The decision comes as a surprise as many grew rapidly during the pandemic.

Last week, Lyft announced that it would lay off 13% of its employees.

Payments processor Stripe also said it would cut 14% of its workforce.

Additionally, e-commerce giant Amazon has announced that it will pause corporate hiring.

Facebook’s rival Twitter made heavy cuts Friday after Elon Musk bought the social media company.

Twitter’s cuts have impacted its AI, marketing and communications, research and public policy team, just to name a few of the departments involved.

According to Bloomberg, Twitter asked dozens of laid-off employees to return.

Reference:

Wall Street Journal: Meta is planning significant layoffs

Meta to make changes after stocks fall 17%

Leah Cooper on October 31, 2022

Meta announced its second-quarter results on Wednesday, revealing that the company had declined since its IPO.

The social media giant warns of sweeping changes ahead of 2023, starting with cost cutting.

The decision was taken to deal with the economic crisis which hit Meta’s main online advertising business.

Revenue

Meta posted revenue of $27.7 billion for the three months ending September.

Revenues are down 4% year-over-year but still above Wall Street analysts’ expectations.

The company posted its first quarterly decline in the June quarter.

The company also reported a net income of nearly $4.4 billion, less than half the same period last year.

Meta revenues are below analyst forecasts.

Founder and CEO of Meta, Mark Zuckerberg, released a statement:

“We’re approaching 2023 with a focus on prioritization and efficiency that will help us navigate the current environment and emerge an even stronger company.”

Meta stocks

Shares of the company fell nearly 17% in after-hours trading on Wednesday after the earnings announcement.

Demand for online advertising has recently declined because of the rising inflation and recession fears.

Google and Snap have also seen their ad revenue decline.

Meanwhile, Meta CFO David Wehner said the average price per ad across the company’s platforms fell 18% in the quarter.

App users

The growth of Meta users is slowing due to competitors like TikTok.

The company had 2.96 billion monthly active users on the Facebook app at the end of the quarter, up 2% year-over-year.

However, it declined from last year’s 6% growth in the same quarter.

Meta app’s daily active users grew 4% to 2.93 billion, compared to an 11% increase in 2021.

Zuckerberg noted that Instagram has more than 2 billion monthly active users, while WhatsApp has more than 2 billion.

The metaverse

The core challenges emerge when Meta invests billions of dollars in an ambitious effort to build the metaverse.

However, the metaverse is probably years away from perfection.

Wehner said the operational losses associated with the metaverse in 2023 would continue to increase year-after-year.

The Reality Labs unit lost nearly $3.7 billion in the September quarter.

So far this year, it has already cost Meta $9.4 billion.

Additionally, Reality Labs unit sales were down nearly 50% year-over-year in the September quarter.

Changes and reduction

Altimeter Capital last week wrote an open letter to make changes such as:

Reduce headcount expenses by at least 20%
Reduce annual expenditure by at least $5 billion
Limit investment in the metaverse to $5 billion per year

David Wehner said the company is making significant changes across the board for efficient operation.

Meanwhile, executives said Meta expects the headcount to be around 87,314 or less by the end of 2023, as reported in late September.

“We are holding some teams in terms of headcount, shrinking others, and investing headcount growth only in our highest priorities,” said Wehner.

Additionally, Wehner hinted that Meta might downsize its physical office footprint.

Key investments

On the analyst call, Zuckerberg focused on three key investment areas for the coming years:

Meta’s AI discovery engine, which powers Reels and other recommendations
Ads and business messaging
Meta’s future vision for the metaverse

Earlier this month, Meta introduced its new virtual reality headset, the Meta Quest Pro.

The social media giant made its potential known to professional customers.

Meta expects quarterly revenue of between $30 billion and $32.5 billion for the last three months of 2022.

The forecast expects a decrease of 3.5% compared to the previous year.

Reference:

Meta stock falls 17% as its quarterly profit is cut in half

Metaverse band Kingshift recruits two Grammy-winning producers onboard

Jason Robinson on September 19, 2022

The NFT space was deepened with the development of Kingship, a partnership with Bored Ape Yacht Club.

The virtual group within the Metaverse recently reached out to music producers who have helped the stars create hits to further their cause.

Veteran producers Chauncey “Hit-Boy” Hollis and James Fauntleroy will be serving as co-executive producers.

They will also be the writers of the band Bored Ape and work on creating music for NFT-inspired characters in the videos and worlds of the Metaverse.

Kingship

Céline Joshua of Universal Music Group’s 22:22 label founded the Kingship project. Bored Ape Yacht Club and Mutant Ape Yacht Club NFT.

The NFTs are licensed by famed collector Jimmy “j1mmy” McNelis.

The group’s concept can easily draw similarities with the legendary virtual band Gorillaz.

The main difference is that Kingship is created with a handful of valuable NFTs as the starting material.

The producers

Hit-Boy is a well-known hip-hop producer and three-time Grammy winner.

He has produced hits for some of the biggest names in the music industry today, including Beyonce, Kanye West, Rihanna, Jay Z and Ariana Grande.

Meanwhile, Fauntleroy is as successful as his counterpart.

He’s a four-time Grammy winner and songwriter who’s lent his creativity to big names like Bruno Mars, Beyonce and Justin Timberlake.

Fauntleroy has also produced music for other musicians.

A taste of Kingship

In August, Kingship released a teaser video to promote global candy giant M&M’s.

The teaser gave people an idea of what their musical contribution to the project would look like.

Previously, Kingship released an NFT project that launched 5,000 Ethereum dongles offering special access to exclusive content and future token experiences.

Bored Ape Yacht Club

Since the NFT boom in 2021, no other project has made more noise than Bored Ape Yacht Club.

The project has managed to generate billions in trading volume.

At the same time, its popularity has caught the attention of several big names, including celebrities and athletes.

Yuga Labs, the creators of Bored Ape Yacht Club, raised $450 million earlier this year at a $4 billion valuation.

They are currently working on a Metaverse game called Otherside.

Reference:

Bored Ape NFT Metaverse band taps Beyonce, Bruno Mars producers

Match Group and Tinder Remove CEO, Metaverse Plans Scrapped

Jason Robinson on August 22, 2022

Online dating giant Match Group recently announced a series of changes to the Tinder management team.

The company also announced a number of changes to move the company forward.

Shareholder letter

Match Group CEO Bernard Kim expressed his dissatisfaction with Tinder’s performance in a letter to shareholders.

The letter reveals that the popular dating app has failed to achieve its usual monetization success over the past few quarters.

As a result, Match Group’s original earnings growth forecast for the second half of 2022 will not materialize.

Kim attributes Tinder’s troubles to some improvements and poor implementation of new product initiatives.

However, he said that the product implementation and application speed could still be improved.

Departure and change

Also on Tuesday, it was announced that Tinder CEO Renate Nyborg will be leaving the company after less than a year with the company.

With Nyborg gone, Tinder will also reorganize its management team, including:

Former Match Group Chief Strategy Officer Faye Iostaluno becomes COO of Tinder
Newcomer Mark Van Liswick takes on the role of Tinder’s Chief Product Officer with experience as a gaming CEO
Tom Jack, an 11-year Match Group veteran and CTO of Tinder, has been the company’s Chief Technology Officer for the past five years.
Amarnath Thombre, CEO of Match Group Americas and a 15-year veteran, advises Tinder executives on the roadmap and product growth.

Bernard Kim has revealed that he will oversee the team as Tinder continues its search for a permanent CEO.

Engagement

This number suggests younger users are less likely to use dating apps like Tinder. This is a cultural shift beyond the impact of the pandemic.

People are coming out of the COVID-19 lockdown and returning to their normal routines, according to a report, but they’re not as ready to dive into online dating apps for the first time as they were before the pandemic.

Conversely, Match Group found that the most engagement on Tinder came from existing users.

Metaverse

With the revamp of Tinder, the “Metaverse” plan has been reduced.

With the acquisition of Hyperconnect, Match Group plans to develop a new form of online dating in a virtual environment.

However, the idea was shelved as Match Group plans to address other issues.

“Given uncertainty about the ultimate contours of the metaverse and what will or won’t work, as well as the more challenging operating environment, I’ve instructed the Hyperconnect team to iterate but not invest heavily in the metaverse at this time,” Kim wrote.

“We’ll continue to evaluate this space carefully, and we will consider moving forward at the appropriate time when we have more clarity on the overall opportunity and feel we have a service that is well-positioned to succeed.”

Crypto

Match Group has also been proposed to unlink cryptocurrency as an experiment with Tinder Coins (which the company will use for its Metaverse plans and long-term roadmap).

“After seeing mixed results from testing Tinder Coins, we’ve decided to take a step back and re-examine that initiative so that it can more effectively contribute to Tinder’s revenue,” said Kim.

“We also intend to do more thinking about virtual goods to ensure that they can be a real driver for Tinder’s next leg of growth and help us unlock the untapped power users on the platform.”

Revenue

Match Group reported revenue of $ 795 million in the second quarter of 2022, up 12% year-over-year.

However, the figure was below the Wall Street average estimate of $ 804.22 million. The company also reported a loss of $ 31.86 million.

The estimates for the next quarter are also not good, as the company expects steady growth in the third quarter from $ 790 million to $ 800 million, which is lower than its estimate of $ 833 million.

Reference:

Tinder to kill virtual currency, metaverse plans amid Match Group earnings loss;Tinder loses its CEO