Welcome to the WeChat subscription number of “Sina Technology”: techsina
Text/Baijiao
Source: Qubit (ID: QbitAI)
Silicon Valley, winter has come.
First, an open letter from Zuckerberg, 11,000 families slept through the night.
Just one year after Zuckerberg all in the Metaverse and Facebook changed its name to Meta, the Silicon Valley giant shocked everyone with the “largest layoff in history”.
11,000 employees were laid off, divided into business but not hierarchical, old and new, and even old employees who had worked for 7 years, said they would be unemployed if they were unemployed.
Based on previous layoffs from giants such as Twitter and Intel, Meta’s move will undoubtedly push this wave of “Silicon Valley layoffs” to its peak.
And just now, Amazon broke history again——
Be the first company to lose $1 trillion in market value!
From the highest market value of 1.88 trillion US dollars, it fell to 879 billion US dollars, and nearly 4 Metas were directly lost.
The ensuing layoffs, the epic plunge in stock prices… The winter in Silicon Valley is cold, really a bit cold.
Xiaozha lays off 11,000 employees in an unprecedented manner
Let’s look at Meta first. Early in the morning or even in the middle of the night, employees who were laid off received emails one after another.
Immediately, their Meta system permissions were immediately shut down, leaving only one day’s e-mail access as a final farewell.
Many said the total number of layoffs far exceeded expectations.
Internal staff revealed that developers should account for 30% of the total number of layoffs.
And according to the “New York Times”, the layoffs are not “indiscriminate”, and the relevant departments of the Metaverse are basically unaffected.
The open letter stated two fundamental reasons for the layoffs:
First, revenue was lower than expected, mainly due to poor market conditions and increasingly fierce competition with companies such as TikTok, which hindered the core business.
The second is to ensure the efficient operation of the application family and Reality Labs.
More specifically, Xiao Zha made a mistake in his own judgment, believing that the epidemic would bring permanent growth, and thus began to expand enrollment on a large scale. But anyway, it has little to do with the Metaverse.
On the contrary, in the future, Xiao Zha said that he will continue to build the metaverse.
The open letter mentioned that after the layoffs, the company’s investment will be transferred to the AI discovery engine, advertising and commerce platforms, as well as the metaverse as a long-term vision – giving priority to ensuring the growth of these businesses.
In addition to layoffs, Meta will also cut expenses in all aspects, including infrastructure.
Meta’s recruitment will also be frozen until the first quarter of next year.
In terms of compensation, many people say that they are “very conscientious”, including 4 months of basic salary + half a month for every full year of work, with 6 months of medical insurance and unfinished paid vacation deductions money…
Notably, the letter states that layoffs are a “last resort” for Meta. And to stretch the front line, such large-scale layoffs are actually traceable.
On the one hand, the large-scale expansion of external recruitment has led to a bleak market, and of course Meta is not the only one. As of September, Meta had an unprecedented 87,314 employees. In the first 9 months of this year alone, 15,000+ employees were added. Microsoft and Google are also crazy to recruit 36,000+ employees within a year.
In terms of market performance, Meta is the worst loser here. Year-to-date, Apple shares are down 18.3%, Alphabet is down 40.5%, Amazon is down 44.7%, and Meta’s is a whopping 73.1%. In addition, revenue has declined year-on-year for two consecutive quarters.
△ Mata’s Q3 quarterly financial report for this fiscal year
On the other hand, Nei Xiaozha has always hinted to everyone intentionally or unintentionally: We are in a difficult time now.
In March, he announced cuts or cancellations of some benefits. In July, he warned employees that the company was going through “one of the worst recessions in history.”
By September, at a routine meeting, he began to take precautions, telling employees that hiring would be frozen and the team restructured.
In addition to Xiao Zha himself, Meta’s shareholders have long been unable to bear it. Last month, they publicly suggested that Zuckerberg reduce personnel expenses by at least 20%, reduce annual expenses by at least 5 billion US dollars, and reduce the Metaverse and Reality Labs. No more than 5 billion yuan will be invested in it.
Now, Zuckerberg has taken a substantial step. But even so, Xiao Zha still stood firmly on the side of the Metaverse, and even in the end, in order to appease the hearts of the people, he said bluntly: We are seriously underestimated.
Amazon’s market value falls by $1 trillion
The cold wind of Silicon Valley is not only blowing to Meta, but also to Amazon.
Just now, its market value fell to 878.77 billion, and $1 trillion has evaporated since its peak of $1.88 trillion in 2021.
It also made it the first company in history to lose $1 trillion in market value.
You know, Amazon was also one of the first companies with a market value of $1 trillion (the second company after Apple).
But as fast as it went up in the first place, it has fallen as fast now.
Such an avalanche of market value can already be predicted from Amazon’s financial report data this year:
Its revenue grew just 7% in the first quarter, compared with a 44% increase a year earlier. It has reached the lowest growth rate in history since the burst of the Internet bubble in 2001. At the same time, Q1 net loss amounted to 3.8 billion US dollars.
Revenue briefly beat market expectations in the second quarter and the stock rose 13%, but it soon reversed in the third quarter.
Although revenue growth reached 15%, it did not meet Wall Street expectations, causing the stock price to collapse by 16% after the earnings report. At the same time, AWS, which has been highly anticipated, has not performed well, and has also achieved the lowest growth rate in history.
The above ugly financial report data, due to the reasons, can be roughly divided into the following two aspects:
-
High Costs of Continued Expansion
-
Core business faces growth problems
One is the high cost of continued expansion.
Affected by the epidemic, Amazon’s e-commerce business has grown by leaps and bounds in 2020. That year’s Q4 revenue reached US$125.6 billion, a year-on-year increase of 44%, and the profit in the same period reached US$7.2 billion, more than double the same period last year.
However, the surge in business volume and the fact that many employees are on leave due to illness have forced Amazon to adopt a strategy of substantial recruitment expansion.
In Q3 2020 alone, Amazon has soared by 248,500 employees. In Q3 last year, it also added 133,000 employees.
Throughout the pandemic, Amazon has spent more than a billion dollars to double the size of its logistics network.
Second, the core business growth rate was lower than expected.
Nowadays, the enthusiasm for e-commerce consumption has gradually faded, and overseas offline consumption has gradually picked up. In addition, e-commerce platforms such as Shein, Teum, and Shopify are also rapidly rising, competing with Amazon for the market.
This has led to Amazon’s e-commerce business in the past two years being “not so profitable”. Construction plans for at least 16 warehouses have been cancelled or postponed this year, mainly due to a slowdown in e-commerce business.
At the same time, AWS, which is regarded as Amazon’s richest scene, has not performed as well as expected recently: for the first time since Q4 2020, the revenue growth rate has been less than 30%.
This is seen by the market as a red flag, as it could mean that the world’s largest cloud service provider is already showing signs of sluggish growth.
Coupled with the recent rise in energy prices, Amazon’s shipping spending in Q3 this year jumped 10% directly to $19.9 billion.
…
Under the influence of various factors, Amazon is also desperately tightening its belt to live.
A month ago, hiring in its retail business was put under a blanket freeze. This week, the freeze was extended to the entire Amazon and is expected to last for several months.
And now is the eve of the big promotion at the end of the year. As usual, this is the time to vigorously recruit troops.
Amazon founder Bezos directly and publicly reminded everyone to prepare for “winter”.
The winter of Silicon Valley is not only here
On the same day that Meta and Amazon slammed, the real estate e-commerce company Redfin officially announced its second layoff this year, with a ratio of 13% and a total of 862 layoffs.
And this is actually just the beginning of the winter in Silicon Valley.
According to Forbes statistics, since May this year, there have been many giants that have laid off their employees significantly, among which are familiar names:
Microsoft, Apple, Intel…
In October, Microsoft laid off nearly 1,000 employees across multiple divisions including Xbox, strategy and technology.
Although this figure is less than 1% of the total number of Microsoft employees, it is also completely different from Microsoft’s previous crazy recruiting style.
Apple has also been exposed to suspend hiring for most jobs, except for R&D positions.
Foreign media Insider said that Apple’s suspension of recruitment may last until the end of September next year.
Also in October, Bloomberg reported that Intel would also lay off thousands of jobs, including about 20% of its sales and marketing staff.
One of Intel’s core businesses has been hit hard this year: Demand for PC processors has plummeted, and the company’s profits have plummeted, so they have started cutting costs.
Intel CEO Pat Kissinger affirmed the rumors of layoffs in an interview, but did not specify how many people will be cut.
According to statistics from human resources agency Challenger, Gray & Christmas, this October, the US technology industry laid off 9,587 jobs.
…
Obviously winter has come, and Silicon Valley workers must accept this round of unprecedented turmoil.
How to deal with it?
Maybe still:
Keep building&keep learning．
Reference link (swipe up and down):
[1] https://ift.tt/v3ARDFI
[2] https://https://ift.tt/pfSyv5Y
[3] https://ift.tt/68RljZ9? international=true&r=US&IR=T&utm_source=reddit.com
[4] https://https://ift.tt/wmyIHdS
[5] https://ift.tt/xrw16nO -us-layoffs-this-year/? sh=6fd78ef04ee3
[6] https://https://ift.tt/wmyIHdS
[7] https://ift.tt/PTKIprX
[8] https://ift.tt/7KT93qW
(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)
This article is reproduced from: https://finance.sina.com.cn/tech/csj/2022-11-10/doc-imqqsmrp5634598.shtml
This site is for inclusion only, and the copyright belongs to the original author.