Yesterday, Meta laid off 10,000 workers. Big tech companies, like many other businesses, faced several challenges during and after the COVID-19 pandemic. While some tech companies thrived during this period, others experienced difficulties that led to layoffs.
How Meta earn money
Meta generates revenue primarily through advertising. The company provides a platform for advertisers to reach their target audiences through various ad formats, such as sponsored posts, display ads, and video ads. Advertisers can create and manage their campaigns through Facebook’s Ads Manager. Facebook’s advertising model is based on a pay-per-click or impression basis, meaning advertisers pay for clicks or views of their ads. In addition to advertising, Facebook also generates revenue through other sources, such as:
Meta allows users to make payments for various services and products within its platform, such as games and virtual gifts. The company also charges fees for its developer tools and services.
Meta acquired Oculus VR, a virtual reality company, in 2014. Oculus VR produces and sells VR hardware, such as the Oculus Quest and Rift, and generates revenue through the sale of these products.
- It offers other services, such as Workplace, a collaboration platform for businesses, and Portal, a smart display device for video calling. These services generate revenue through product sales and subscriptions.
Big investment in Metaverse
Meta has announced plans to invest in the metaverse, a virtual world where people can interact with digital environments and each other in real-time. The company’s decision to invest in the metaverse is based on several factors:
- Growth Potential: The metaverse represents a new frontier for technology and has the potential to become a major part of the future digital landscape. By investing in the metaverse, META is positioning itself to take advantage of this growth potential and to shape the development of this emerging technology.
User Engagement: The metaverse represents an opportunity to create new and immersive experiences for users. By investing in the metaverse, META is aiming to keep users engaged with its platform and to create new revenue streams from virtual goods, advertising, and other forms of monetization.
Competition: Other tech companies, such as Roblox and Epic Games, are also investing in the metaverse and building their own virtual worlds. By investing in the metaverse, META is aiming to stay competitive and maintain its position as a leading player in the tech industry.
Strategic Vision: The metaverse aligns with META’s long-term vision of connecting people and creating communities online. By investing in the metaverse, META is aiming to create a new platform for social interaction and to shape the future of online communication and collaboration.
Stop of Metaverse
In fact a few years ago, the company had indicated a strong interest in developing the metaverse and had made several announcements related to this effort, such as the creation of a new Metaverse Product Group within the company and the acquisition of several VR and AR companies. However, the projects from META did not gain much interest and adoption from users and developers. The virtual worlds were largely empty and inactive. This was likely due to the niche and sci-fi nature of metaverse projects which have not become mainstream.
META shifted their priorities to focus on developing the Metaverse OS, an open blockchain-based infrastructure for metaverses. They believe this underlying infrastructure will be more impactful to enable an open and interoperable metaverse, compared to building specific virtual worlds. Resource constraints. As a small startup, META likely faced significant resource constraints to develop and maintain their metaverse projects, in addition to building the Metaverse OS infrastructure. They had to prioritize more impactful initiatives. Speculation issues.
Some of META’s value and funding was based on speculation around their metaverse projects. But with lack of real progress, interest, and adoption, the speculation hype faded. This likely also contributed to shifting priorities away from the metaverse projects.
More layoff is coming?
The way companies handle layoffs can vary depending on the specific circumstances and company culture. However, there are some common practices that many companies follow when conducting layoffs:
- Economic Downturn: The pandemic caused a global economic downturn, affecting businesses across all industries. To cut costs and survive during the recession, some tech companies had to lay off employees and streamline their operations.
Shift in Business Strategy: COVID-19 forced many companies to change their business strategies and adapt to the new normal. Some tech companies had to pivot their focus to more relevant products or services, which may have led to layoffs in areas that were no longer considered core to the business.
Remote Work: The pandemic accelerated the adoption of remote work. As companies shifted to remote operations, this created opportunities to outsource work or hire talent from different locations at a lower cost, potentially leading to layoffs of local employees.
Automation and Digital Transformation: The pandemic sped up the adoption of automation and digital transformation across industries. As companies invest in automation and new technologies to improve efficiency and reduce costs, some jobs may be replaced or become obsolete, leading to layoffs.
- Competitive Pressure: The tech industry is highly competitive, and the pandemic intensified the competition. Companies that were unable to keep up with the rapid changes or that lost market share may have been forced to lay off employees in an effort to reduce costs and stay competitive.
Overall
It’s important to note that not all big tech companies laid off employees during or after the pandemic, and some even expanded their workforce. The reasons for layoffs can vary greatly depending on the individual company’s circumstances and strategic decisions.