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Job cuts at Twitter, Meta presage dark days ahead

Twitter India has fired close to 90 percent of its workforce. Indeed, there are rumours that its India office might be shut down altogether.

By  Tasmayee Laha RoyNov 7, 2022 7:43 PM
Job cuts at Twitter, Meta presage dark days ahead
A lot of companies are looking at cutting down non-essential spends. Areas like advertising are some of the first few things that are impacted when companies go on a cost-cutting mode. This adversely impacts platforms like Meta, Snap, and Google, who are also forced to cut costs to compensate for the loss in advertising revenue.(Representative Image via Unsplash)

Layoffs, job loss, security, firing, and RIF (reduction in force) are some of the hashtags trending across social media platforms. The past couple of months have seen multiple internet companies like Microsoft, Snap, Stripe, and many others announce layoffs. The layoffs at Twitter are the most recent, and more may be in the offing.

Reports suggest that Meta is planning to hand out pink slips to employees across the board. The announcement is expected anytime this week. Sources reveal that teams like social impact, partnerships, communications, and programs may be hit. Internet firms that aren’t laying off employees yet are planning to go on a hiring freeze.

The macro-economic situation and the possibility of a global economic recession are not the only reasons behind the firings and the hiring freeze.

“Can we continue to run the business with fewer people is a question companies are asking themselves,” says Adhvith Dhuddu, CEO of digital marketing and creative-tech agency AliveNow.

Unfortunately, in most cases, the answer is, yes.

Most of the companies that have cut jobs were excessively bloated, says Rituparna Chakraborty, Co-Founder and Executive Director of TeamLease Services, an HR services firm.

“Choices around profitability should always be hinged around sustainability and ROI (return on investment). Chasing quick growth or grabbing eyeballs by hiring a number of people is not sustainable. Balance is very important in the scheme of things,” said Chakraborty.

Meta, for instance, has been witnessing a few slow quarters. The third quarter results of 2022 point out total costs and expenses touching $22.05 billion. An increase of 19 percent year-on-year (YoY). Revenue for the quarter stood at $27.71 billion, a decrease of 4 percent YoY.

Other companies too saw falling numbers. Snap clocked a net loss of $360 million in the third quarter of 2022. Twitter had a net loss of $270 million in the second quarter.

A lot of companies are looking at cutting down non-essential spends, says Dhuddu. “Areas like advertising are some of the first few things that are impacted when companies go on a cost-cutting mode. This adversely impacts platforms like Meta, Snap, and Google, who are also forced to cut costs to compensate for the loss in advertising revenue,” he says.

Meta’s quarterly results for both the second and third quarter showed weak advertising demand. In the second quarter of 2022, ad impressions delivered across its family of apps increased by 15 percent YoY, while the average price per ad decreased 14 percent YoY. In the third quarter, ad impressions increased by 17 percent YoY, and the average price per ad decreased by 18 percent YoY.

There is no hiring on the horizon for these companies unless we see the first shoots of recovery, say experts.

The chaos in the wake of layoffs has been exacerbated by Twitter calling back employees that have been fired. The situation is even worse at Twitter India, where close to 90 percent of the employees have been fired. Indeed, there are rumours that the India office might be shut down altogether.

First Published on Nov 7, 2022 7:43 PM