“The era of overgrowth is behind them”

Faced with structural problems reinforced by the global economic context, Meta is preparing the first wave of mass layoffs for Wednesday, according to the US press. But despite the difficulties, Facebook’s parent company is keeping the assets.

What’s going on in the Meta? A week after its fall on the stock market, the company that unites Facebook, WhatsApp, Messenger and Instagram is preparing, on Monday, November 7, the first wave of mass layoffs of its history, according to the Wall Street Journal, which refers to Wednesday’s date for the official announcement. Several thousand of the group’s 87,000 employees could be affected.

Facebook’s parent company is indeed suffering from long-standing structural problems, exacerbated by a gloomy global economic context. Meta suffered first of all from the massive investments made by Mark Zuckerberg for its development metaverse, the Internet of the future where the user will be able to interact in a virtual world in augmented reality. Still in its infancy, this financial black hole has swallowed $21 billion in two yearswithout convincing either the investors or the public.

A deserted world on the Internet

Horizon Worlds, a virtual reality platform billed as the “first brick” of the metaverse, so joins less than 200,000 monthly users after ten months of existence. according to the Wall Street Journal. The online world is, apparently, a deserted world and the fate of the metaverse leaves most observers skeptical.

“It is impossible to predict the future of the metaverse, but what has been done is not very profitable at the moment,” notes Dominique Boullier, sociologist of digital uses at Sciences Po Paris. These investments do not give a good image of the group. : if it is normal for them to lose money, it is again of considerable proportions.”

“Metaverse risks remaining a niche,” says Virginie Clève, digital strategy consultant. Second life [un univers virtuel sorti en 2003, NDLR], which captivated and completely ran out of steam. All the more so that the cost of energy required for its operation is colossal and, in the current context, seems unrealistic”.

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Lack of confidence

Intended to be the future of the Internet, Mark Zuckerberg’s crazy project also raises questions about respecting users’ personal data. “The goal of the metaverse is to capture all the data of the users through all their activities, up to the way they look in the virtual world, in order to make money, underlines Dominique Boullier. This strategy is likely to constitute a problem with GDPR [le règlement général sur la protection des données, texte européen, NDLR]. And users can also get tired of this kind of very privacy-intrusive, permanent capture.”

Meta also suffers from his bad reputation in this matter. Voted the year’s “worst company” in December 2021 by Yahoo Finance, the company saw its image tarnished by the Cambridge Analytica and Facebook Papers scandals. regardless of changing his namedoubts about its ethics persist and its advertising revenue, already weakened by the global economic context, shrinks.

“Meta is going through a negative phase in terms of reputation, emphasizes Dominique Boullier. The company is suffering from a deteriorating image with investors and advertisers. Investments continue, but brands no longer have full confidence, investment and no longer want. to put all their eggs in one basket.”

Conflict with Apple

The company further lost billions of dollars in ad revenue due to changes Apple made to its mobile operating system in 2021. Criticizedthe Apple brand has implemented greater protection of the personal data of its users, reducing Meta’s capabilities in terms of targeted advertising.

The two giants are also at loggerheads over the 30% tax Apple plans to impose from October on sponsored content broadcast on Facebook and Instagram, on top of what it already imposes on in-app purchases. Mark Zuckerberg thus recognized the “problems of ad targeting” which, he added to the agingto drop in audience and stiff competition from TikTok, are melting its revenues.

“Away from Bankruptcy”

But make no mistake: the company remains “far from bankruptcy”, remembers Virginie Clève. “The meta continues to generate significant amounts and remains very powerful,” explains the specialist. They are far from bankrupt, Instagram maintains strong growth, both in terms of users and monetization.”

Therefore, the company has something to resist. “They have three irons in the fire,” explains Dominique Boullier. With WhatsApp, Facebook and Instagram, Meta manages to balance itself: the flagship app varies by country, but, in general, the company has the opportunity to get back on its feet. thanks to the variety of its offers.”

Meta also maintains the ability to effectively copy the innovations of its competitors and does not hesitate to “cut dead branchesMark Zuckerberg thus stopped the partnership that brought Facebook together with various press titles and hailed the success of “Rolls”these short videos directly inspired by competitor TikTok.

“140 million [de Reels, NDLR] are played every day on Facebook and Instagram, 50% more than six months ago, welcomed the head of Meta at the end of October. “We believe we are gaining market share over time spent on competitors like TikTok.”

Despite the loss of speed, the network thus retains nearly three billion daily users worldwide in 2022 – including 40 million in France – which it will not lose. “It’s complicated to leave a social network, notes Dominique Boullier. Once a user has invested in it, making the decision to leave is costly, you can’t recover everything you did there.

If the golden age of Facebook now seems behind it, all is not lost for the royal social networking company. “The era of hypergrowth is behind Meta, it is affected for the first time by the global economic context like any other company”, summarizes Virginie Clève. But we should not talk about the twilight of all this, but about an age of maturity. The meta continues. to generate stratospheric income”.

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