The aftermath of the COVID-19 economic shutdown, the turmoil in Ukraine, and worries about climate change have all significantly impacted the sluggish status of the world economy. This unfavourable situation is having a negative impact on global job creation. All this has led to a situation where even a small report of layoffs at massive corporations causes a negative commotion in the business world.
As a result of sluggish growth, Google and Facebook parent company Meta, both tech behemoths, are in the process to lay off workers to reduce costs, according to a report in Wall Street Journal (WSJ).
The outlet further said that Meta hopes to reduce its expenses by at least 10 per cent in the coming months by reorganising departments and giving employees a chance to apply for other roles internally.
The Journal further said that all these measures will lead to reduced employment. It is anticipated that the cost-cutting will start in the next few months.
In July, Meta Platforms Inc. had issued a gloomy forecast after recording its first-ever quarterly drop in revenue, with recession fears and competitive pressures weighing on its digital ad sales.
The company said it expects third-quarter revenue to fall to $26 billion and $28.5 billion, which would make it a second year-over-year drop in a row. Analysts were expecting $30.52 billion.
WSJ further said that Google has also asked some employees to look for internal roles if they wish to remain at the company. Last week, Google told roughly half of the more than 100 employees at the company’s startup incubator ‘Area 120’ they would need to find a new internal role within 90 days.
The cost-cutting measures taken by Google and Meta reveal how these ad-based tech giants are preparing for a downturn in the economy.
Both companies have previously hinted that they were looking into cost-cutting measures.
Sundar Pichai, the CEO of Alphabet, reportedly informed Google staff members in July that the company would reduce hiring for the rest of the year.