In tech news time — time as dense as a neutron star — it feels as if it has been an age since this column checked in with Meta Platforms, parent company of Facebook, Instagram and WhatsApp. Even though it has made many announcements lately, due to the Silicon Valley Bank collapse and launch of ChatGPT-4, Meta’s share of voice has been greatly diluted.
Now I get that a social media company well into its second decade, with a user base skewing towards middle age, is not as sexy as cutting-edge generative artificial intelligence (AI), but still, Meta’s relevance is hard to overstate. About 75% of all internet users, or 50% of the global population, are active on at least one of Meta’s platforms, and almost 80% of Facebook users engage with the platform daily. Every. Single. Day.
It’s the kind of scale and engagement that tech founders daydream about, “what if…?” kind of numbers, and yet, at the moment, the company has been washed with the fuddy-duddy brush.
On top of the blow to ad revenue that came from Apple’s privacy policy changes, Meta is facing legal challenges in Europe, the US, Canada and Kenya. But writing off Meta would be a huge mistake as it provides this incredible real-time case study: of how the world of tech is evolving; the headwinds tech faces; and the interconnectedness of this sector.
Cancelling projects
If nothing else the latest news out of Meta — that of even more layoffs — is a cautionary tale. In November Meta gave 11,000 global workers their marching orders. Now, mid-March, CEO Mark Zuckerberg shared updates with staff via a memo (later published on the corporate news page) on how the “Year of Efficiency” programme was shaping up. This is what it is calling cost-cutting efforts to “improve financial performance in a difficult environment”. The memo confirmed that 10,000 more Meta people will be let go, and about 5,000 vacancies closed.
The recruiting team will be one of those most affected for obvious reasons, as will management with promises of flattening the structure, but Meta will also be restructuring tech teams in April and business groups in May, as well as “cancelling lower-priority projects”.
On the one hand, it tends not to be a good thing when we see companies reducing staff numbers by 24% in fewer than six months. That’s almost one in four jobs cut, raising concerns about past and future productivity.
On the other, layoffs aren’t a bad sign for everyone. In fact, despite the financial reporting rollercoaster of recent quarters, Meta’s shares were buoyant (at the time of writing) due to a ratings upgrade by Morgan Stanley, which gave Meta’s cost-cutting — including downsizing staff specifically — the thumbs up.
Analysts at Morgan Stanley said they expect the cost reduction at Meta to continue beyond 2023, but they saw this as a sign of the firm making a “structural and cultural pivot” to leanness, and they believed this would be an example for other tech companies such as Google’s parent company, Alphabet, and Amazon.
Reputation
This strikes me as an odd thing to say to companies that have just cut 12,000 and 18,000 jobs respectively, but I guess that’s why I am not a management consultant or investment analyst, just a lowly tech commentator wondering when Big Tech gave up its aspiration to be different to its corporate forefathers. If nothing else, layoffs at this volume are an own-goal for reputation and morale.
Also last week Meta confirmed the rumours that it was investigating the viability of a “stand-alone decentralised social network for sharing text updates”, which sounds a lot like Twitter by any other name. Let’s parse that: a spokesperson for the company told media it sees this as a “separate space” — existing outside Facebook, or Insta, for example — in which “creators and public figures” — that’s anyone creating content and putting it out to the world, really — can share “timely updates” — a chronological newsfeed. Yup, that checks the Twitter boxes, though it will follow a federated model such as Twitter rival Mastodon. Does this indicate that Meta is betting on Twitter’s demise, or is it just an opportunistic move?
That’s not the only Twitter-esque move we’ve seen from Meta lately. After the launch of Twitter Blue, Meta’s own paid verification service (imaginatively named Meta Verified) began rolling out to Facebook and Instagram users in the US just two days ago.
And speaking of riding the tides, there is also speculation in some circles that AI has killed Zuckerberg’s metaverse dreams, or that it will be quietly but considerably deprioritised. Over the course of 2021 and 2022 Reality Labs (the Meta metaverse engineer) recorded losses amounting to almost $24bn. That’s a lot to sink into virtual worlds that consumers still seem reluctant to embrace.
So while the latest memo reads the metaverse “remains central to defining the future of social connection”, it looks like Meta is now betting on AI, promising “our single largest investment is in advancing AI and building it into every one of our products”.
In the grand scheme, these two emerging technologies are expected to develop in parallel, and both will shape the way we interact with technology in the near future. But within Meta, with a real-world limit on its R&D budget and its appetite for spend and risk, it might well be a zero-sum game.
Are verification and AI integration the answer to Meta’s revenue woes rather than luring users to the meta-side? Or, for — forgive me — to metaverse or not to metaverse? That is the question.
• Thompson Davy, a freelance journalist, is an impactAFRICA fellow and WanaData member.
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