Facebook considers freezing hundreds of contracts in Spain after the technological slowdown

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Meta, the parent company of Facebook, WhatsApp and Instagram, is “slowing down its growth” in the short and medium term. The company announced in 2021 an investment of billions of dollars to develop the metaverse and the hiring of 10,000 people in Europe to shape that technological evolution. At least 2,000 of them were going to be produced in Spain. A deployment that was going to begin immediately but that Meta is “reevaluating” given the sum of difficulties that have accumulated in recent weeks.

The drop in revenue shown by its quarterly results, the war in Ukraine —which has forced the closure of its networks in Russian territory— and the slowdown that all digital services are suffering after the end of the pandemic restrictions have forced Meta to alter its expansion plans. Spain will not be an exception, sources from the multinational acknowledge to elDiario.es.

“We periodically reassess our talent portfolio based on the needs of our business and, in light of the spending guidelines given for this period of results, we are holding back its growth accordingly,” details a spokeswoman, who anticipates that the intention to Meta’s long-term goal remains growth: “We will continue to grow our headcount to ensure we focus on long-term impact.”

With the 2,000 announced hires, Meta wants to double the size of its offices and open “the world’s first Meta Lab”, a support center for its remote workers “with space for technology entrepreneurs and startup local”. The investment is completed with the construction of a submarine cable.

Meta has also announced its intention to build its data center for southern Europe in Talavera de la Reina, in which it plans to invest 1,000 million euros. It is, however, a movement unrelated to the aforementioned deployments and is being negotiated with local and regional authorities.

Meta suffered one of its biggest economic setbacks in its history in February, when it announced its 2021 results. Its profits increased from the previous year but its flagship, Facebook, lost users for the first time.

What raised alarm bells, however, was Mark Zuckerberg’s acknowledgment that new international privacy restrictions, as well as Apple’s decision to give users the ability to restrict the tracking of personal data by third-party apps are greatly affecting your business. In 2021 the company stopped earning 10,000 million dollars for this reason and calculated that in 2022 the hole will be bigger. The result was that Meta lost almost 40% of its value on the stock market, some 350,000 million dollars, a blow from which it has not recovered.

The quarterly results of Meta have confirmed these forecasts, but they have been joined by a notable slowdown in the business of social networks in particular and of technology in general. Among its main competition, they have lost another 100,000 million dollars so far in 2022: Snapchat has lost 70% of its value since January, equivalent to about 50,000 million dollars; while Twitter is navigating a storm called Elon Musk, who first sent his shares soaring by announcing his purchase intent and then plunged them by his complaints about fake accounts. TikTok, which could be the counterpoint to this trend, is not listed on Western markets.

But the change of third goes beyond social networks. The pandemic multiplied the value of technology companies and made their services essential in the face of the confinements forced by the virus. The end of the tunnel is assuming a correction in the business of most of them. Google has left 23% of its value so far this year; Apple, 8% and Microsoft, 20%. The Nasdaq, the stock index that groups the 100 main technology companies listed in the US, has fallen 23% since the beginning of 2022.

Amazon is one of the biggest losers, falling 36%. This week its financial director affirmed that the company could have made the mistake of hiring too many workers during the worst part of the pandemic and that now it has too many, for which, it assures, productivity has fallen. However, the company rules out that it will alter its plans to continue hiring in Spain. “Our commitment to Spain remains, and we are in a good position to fulfill our commitment to have 25,000 permanent employees in the country in 2025,” sources from the multinational explain to this medium.

Many companies have gone beyond the hiring freeze that Meta has proposed. One of the main ones is Netflix, mired in its own crisis beyond the current situation in the sector, which has cut its workforce by 150 people and does not rule out more exits.

The layoffs are spread across the smaller companies. The Peloton sports machine rental company; the WeDoctor medical teleconsultation service; the trading application Robinhood or the used car sales platform Carvana have announced significant workforce reductions, all in the US.

However, layoffs have also begun to be seen in Spain, although everything indicates that in a more circumstantial way to certain companies. Gorillas, a 10-minute supermarket delivery startup, has announced that it is going to “restructure” its Spanish division, which could mean the dismissal of hundreds of riders. The workers of Domestika, an online learning community, have recently denounced that the company has carried out a “covert ERE”, something that it denies.

Technological employers admit the difficulties but call to remain calm. “We are living through times of uncertainty and economic instability in all sectors. Organizations have been affected by this context and technology companies are no exception,” acknowledge sources from ADigital (which brings together Google, Indra, Glovo, Just Eat, Facebook or eBay). “The reality is that in our labor market there is a great demand for workers technology“, they remember.

From DigitalES (IBM, Huawei, HP or Qualcomm) agree on this point. “In Spain, in general terms, infrastructure companies cloud, communications and technology consulting have a large number of vacancies open. There is also a strong demand for employment —for which in many cases there are not enough profiles— in everything related to cybersecurity, the development of extended reality and artificial intelligence, as well as for software development profiles”.

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