Editorial: Meta jobs cuts no big surprise, but are still of deep concern

But even in the bulletproof tech sector, you have to be careful what you wish for. He has now declared this to be the “year of efficiency” – a plan to cut costs as his company, Meta, struggles to come good on its hugely ambitious virtual reality venture, the metaverse.

The harsh reality of this ‘efficiency’ has come home for 490 Irish workers, whose jobs have been axed in the social media giant’s latest cull.

The company reported a peak of 87,000 employees globally last year. This was on the back of a hiring spree that escalated after the Covid pandemic, which sent online activity booming.

This week, Meta has been hit with a €1.2bn fine by the EU for privacy violations and ordered to suspend transfers of user data to the US – the biggest such penalty in the bloc’s history.

Last October, investors wiped $80bn (€74bn) off the company’s market value after a poor earnings report. Around the same time, Amazon boss Jeff Bezos warned of an impending market slowdown.

“Most people dramatically underestimate the remarkableness of this bull run,” he said. “Such things are unstoppable – until they aren’t.”

And right now it appears they aren’t. Meta intends to cut 21,000 jobs and has implemented a hiring freeze. Taoiseach Leo Varadkar said the State would offer support to those affected by the job losses.

The cooling-off in the tech sector, which has been a red-hot industry for so long, is hardly surprising. Yet for those losing their livelihoods, it is deeply concerning. So it will have been reassuring for them to hear Mr Varadkar say the Government will engage with the company to ensure decent redundancy packages.

Some contraction was probably inevitable, given the working-from-home revolution. The war in Ukraine and the supply chain disruption that followed have not helped.

However, as Mr Varadkar pointed out, the latest Central Statistics Office figures showed 2.6 million people were working in Ireland – “more than ever before”.

Yet some people, such as Labour leader Ivana Bacik, have expressed worries that “the Government needs to rebalance power between workers and corporations” in light of the cuts at Meta.

Earlier this year, fears that our over-reliance on the international tech sector could pose risks to growth, employment and tax revenues in the event of a severe or prolonged downturn were cited in an article published by the Central Bank. It argued the best way to guard against such threats was to boost investment and productivity in indigenous tech firms.

There is no cause for alarm, yet the aura of invincibility the sector has had for so long looks a little less impenetrable than before.