The Wall Street Journal reported that Meta Group, the parent company of Facebook and Instagram, plans to lay off thousands of employees starting this week, following the lead of several technology companies in the context of the economic crisis.

Meta employs about 87,000 employees worldwide, according to September 30 figures.

While publishing the latest disappointing quarterly results recently, group president Mark Zuckerberg indicated that the number of employees at the company should not rise by the end of 2023, but rather decline slightly.

According to the newspaper's sources, it is expected that this will be announced on Wednesday and that thousands of employees will be affected in the first such measure in the history of the social media giant.

And last Thursday, two Silicon Valley groups, Stripe and Lyft, announced massive layoffs while Amazon froze hiring.

As soon as Tesla CEO Elon Musk and the world's richest man acquired the Twitter platform, he laid off about half of its 7,500 employees.

Online platforms whose economic model is based on advertising are particularly suffering from advertisers cutting back on spending on the back of global inflation and rising interest rates.

Meta Group net profit fell to $4.4 billion in the third quarter (-52% YoY).

“We are facing a volatile macro economy, increased competition, lost advertising, and increased costs for our long-term investments,” Zuckerberg noted in late October, stressing that “the prospects for our product look, from what I see, better than some comments suggest.”

However, the group's shares fell the next day by 24.56% on Wall Street.

The Meta Reality Lab unit that leads the company's efforts for virtual reality and metaverse posted revenue of $285 million, down nearly 49% from a year ago (Shutterstock)

The fate of the Metaverse is at stake

The Meta Reality Lab unit, which leads the company's efforts for virtual reality and metaverse, reported revenue of $285 million, down nearly 49% from a year ago.

Meta chief financial officer David Weiner said this was due to declining sales of its VR headsets.

The unit incurred an operating loss of $3.7 billion.

Orizon World's flagship product, MetaMetaverse, to consumers, has fewer than 200,000 monthly active users, well short of the company's original target of 500,000 users by the end of this year, according to company documents cited by The Wall Street Journal. Earlier this month.

Meta said its average ad price was down 18% year over year.