UP TO 400 people employed by Meta in Ireland could lose their jobs after Facebook’s parent company announced it is laying off 13% of its staff.
Around 3,000 people are directly employed by Meta in Ireland and Dublin is home to its European headquarters.
Meta CEO Mark Zuckerberg sent a message to employees this morning that confirmed more than 11,000 employees will be let go.
In addition to owning Facebook, Meta also owns Instagram and WhatsApp.
But what has led to today’s announcement of the largest job cull in Meta’s history, and what does it mean for Ireland?
Misplaced expectations
In the message sent to staff, Zuckerberg said: “I want to take accountability for these decisions and for how we got here.”
He went on to write that the “world rapidly moved online” at the start of the Covid-19 pandemic, and that this “surge of e-commerce led to outsized revenue growth”. In other words, the pandemic was good for Meta.
However, tech giants like Meta banked on the continuation of this growth (something which payment company Stripe also highlighted when it announced recent job cuts).
“Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended,” said Zuckerberg.
“I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected.”
Zuckerberg said e-commerce trends have returned to pre-pandemic levels and that ad revenue has also been “much lower than expected”.
Meta has admitted that its business has been impacted by Apple’s privacy updates, which greatly reduce the ability of advertisers to track user activity and target them with adverts based on this data.
“I got this wrong, and I take responsibility for that,” said the Meta CEO of his decision-making.
Zuckerberg also acknowledged “increased competition” as a contributory factor to the trend downwards. While he didn’t mention it in name, the Chinese-owned video app TikTok has exploded in popularity in recent years and is attracting younger users at a higher rate than Meta’s app.
The Metaverse
As a result of all of the above, Zuckerberg says Meta needs to “become more capital efficient” and to shift “more of our resources onto a smaller number of high priority growth areas”.
Zuckerberg has pinpointed “the metaverse”, its augmented reality product, as one of these high priority growth areas.
A year ago, Facebook renamed itself Meta to signal its devotion to a metaverse future. However, some critics say this rebranding was a move distance itself from recent scandals, including whistle-blower Frances Haugen, who said it valued profit over user safety.
The metaverse is the idea of an immersive online world for people to work and socialise in that is usually reached using virtual reality headsets. Last month, Meta unveiled a new version of these virtual reality headsets, one that is tailored for working professionals.
The $1,500 (€1,495) Meta Quest Pro features a number of new features that are meant to improve users’ perception of truly being in the presence of other people.
Zuckerberg believes this will become the next generation of the internet, and the development of the Metaverse is costing Meta billions of dollars.
However, it does not yet exist in any substantial form, beyond a handful of specific and limited apps.
What do the layoffs mean for Ireland?
Ireland is Meta’s largest base outside of the US and is home to its European headquarters. Due to this, there are fears about what the layoffs could mean for such a strategic company here.
A Meta Ireland spokesperson said today’s decision “does not have any impact on Ireland’s status, or on our long-term investment plans in Ireland”.
The spokesperson added: “We appreciate Ireland’s and in particular the Irish Government’s ongoing support for our operations here.”
The job losses will impact Meta’s 3,000 full-time employees in Ireland, but will not affect contract workers employed by third-parties. It’s thought there are 6,000 of these contract workers in Ireland.
The spokesperson added that “the timeline and process will be defined by Irish government guidelines, which will see potentially impacted employees entering collective consultation”.
‘No major crisis in the tech sector’
Despite job losses across Meta, Twitter, and Stripe, Tánaiste Leo Varadkar says the tech sector is still growing and that recent lay-offs “should not be seen as a major crisis in the tech sector”.
“It is a downsizing after years of phenomenal growth,” Varadkar said, adding that the sector will grow again in the medium term.
Stripe is set to lay-off 14% of its staff, while Twitter last week pledged to cut half its 7,500-strong workforce.
Speaking during Leaders’ Questions today, Taoiseach Micheál Martin said “there will be full and proper consultation with employees of Meta and the same applies to Stripe.”
However, the Taoiseach noted that “Twitter is a much different context”.
Minister Damien English confirmed yesterday that Twitter hasn’t been in touch with the Department of Enterprise about job losses at its Irish offices.
Companies proposing to make a large number of their staff redundant are required to inform the Minister for Enterprise at least 30 days before the first dismissals take place.
Meanwhile, speaking during Leaders’ Questions in the Dáil today, Labour leader Ivana Bacik noted that “Zendesk is considering down-sizing and Intel is considering job cuts”.
Speaking to RTÉ’s Prime Time last night, Varadkar also pointed to misplaced expectations for growth as the cause for Meta’s job losses. “Meta almost doubled its workforce in the past three years, but the expectations for further growth do not appear to be what they might have been for lots of reasons.”
However, Varadkar said he was “not unduly concerned” and that Ireland has a “well-diversified economy”.
He said it was “important not to catastrophise or exaggerate” and pointed to “other sectors that are important and are expanding”, such as pharmaceuticals, financial services, aviation, and construction and engineering.
Meanwhile, the Tánaiste dismissed concerns about the impact the current uncertainty in the tech sector could have on corporation tax receipts.
Speaking earlier today, Varadkar said: “I think it’s a good thing that we have a number of very big companies in Ireland that pay a lot of corporate tax.
“That means you and I and small businesses don’t need to pay as much tax as we would in another country, for example.”
However, he acknowledged that it is “a vulnerability and one that we’ve always recognised. “It’s why we’re running a budget surplus, not a deficit,” Varadkar added.
He said this budget surplus “recognises” this “vulnerability” and ensures Ireland can “withstand a reduction in corporation profit tax”.
- With additional reporting from Press Association and AFP
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