Meta and Twitter are becoming a smaller company (headcount wise…)
You must have read, somehow. You may be surprised. You may be thinking if this is a global phenomenon. Well, these two companies have been on the news every day. One is helmed by Mark Zuckerberg and the other by Elon Musk. No idea if both are great friends but they have decided that in order for the company to do better in the near future, it’s best to have fewer people on board. Both have decided to lay off 11,000 and 3,700 employees respectively. Do read the below
Twitter laid off 3,700 of its employees. Article in fortune.com here. In a matter of days, Elon Musk’s $44 billion purchase of Twitter has spurred outrage and sown disorder among company ranks. On Friday, Twitter unceremoniously laid off 3,700 staffers—some 50% of its workforce. The harried and disorganized dismissal came less than a week after the social media giant’s new CEO—er, Chief Twit—billionaire Elon Musk, took the helm. Article in fortune.com here.
Meta is cutting 11,000 employees. Article in cnbc.com here. Meta is laying off 13% of its staff, or more than 11,000 employees, CEO Mark Zuckerberg said in a letter to employees Wednesday. “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history,” Zuckerberg said in the letter. “I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. Do read the full article here: Article in cnbc.com here.
Everyone has potential to be fired
I do not think there are that many people who joined either Meta or Twitter thought that there is likelihood that they could lose their job suddenly. Perhaps those who joined a small unknown firm may have those thoughts instead. What this tell us is the simple fact that we have to take care of ourselves because the company we work for would have to take care of its shareholders first. Else, the company ceases to exist.
This is why a job should not be the only course of income
Sorry, I am not saying everyone should go do deliveries after work. I am saying that our earnings must be invested so that we have returns. This is so that if something unforeseen happens, for example we got retrenched, we could still have time to find another job. At least we still have enough money to pay for meals, pay for petrol, pay for electricity and more.
In many places, this may not be possible and I do think out of the 11,000 people from META or 3,700 from Twitter, there would be people who are now relying on the extra salary payments from both companies after being laid off. In fact imagine if we got laid off and still have to pay rental… or home mortgage. That’s a double whammy because on one hand our income has stopped but on the other hand, expenses will have to continue.
Loss of job means loss of demand for goods and service
If these 11,000 plus 3,700 people uses to spend US$1,000 per month, that’s US$14.7 million and if we use a multiplier effect of 4x, then the loss in economic contribution is US$59 million. In one month, if these people did not manage to find a new job, then the total loss to the economy is US$1.8 billion…. That’s just one month and that’s just based on US$1,000 spending yeah. This is why the GDP growth would slow down if many people are unemployed.
Hope that these numbers are the final ones and everyone in both companies would soon feel that the worst is over.
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