Key Points
- Twitter and Meta have laid off huge numbers of staff.
- Experts say the tech industry is "receding" as the COVID-19 pandemic ends
- Digital rights advocates say a publicly-owned social media platform may be needed.
Social media tech giants Twitter and Meta are sacking thousands of employees, while calls for boycotts of their platforms are growing online.
Since taking over Twitter in late October, Elon Musk has fired around half of the company's 7,500 employees, including around 90 per cent of its staff in India.
The heavily-indebted company was losing more than US$4 million ($6.2 million) a day, Mr Musk said in a tweet.
"Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day, " Mr Musk wrote on 5 November.
As well, many companies, wary of Mr Musk's intentions, have held off committing to advertising on the messaging platform, resulting in a big drop in revenue for Twitter.
Mr Musk blamed "activists" for the company's drop in revenue.
"Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists," he wrote in a Twitter post.
"Extremely messed up! They’re trying to destroy free speech in America."
Meta, the parent company of Facebook and Instagram, laid off around 13 per cent of its staff in November, sacking more than 11,000 employees.
"I want to take accountability for these decisions and for how we got here," Meta CEO Mark Zuckerberg wrote in a company-wide message on Wednesday.
"I know this is tough for everyone, and I’m especially sorry to those impacted."
Mr Zuckerberg said when online commerce surged during the pandemic, he made the decision to "significantly increase" investment into growing the company's size.
"Unfortunately, this did not play out the way I expected," he said.
"Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected.
"I got this wrong, and I take responsibility for that."
Meta stock climbed 5.2 per cent on Wednesday, the day Mr Zukerberg announced the layoffs, closing at US$101.47 ($157.74).
‘Power to the people’? What the future of social media looks like
Mr Musk has promised to take down what he claims is the hierarchical nature of Twitter and provide "power to the people," but some critics say he is making things worse.
"Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bullshit," Mr Musk wrote in a post.
"Power to the people! Blue for $8/month," he said in reference to his plan to make people pay US$8 ($12.50) per month to be verified.
Mr Musk describes himself as a "free speech absolutist" which has drawn criticism from rights groups who say Twitter can be used for hate speech if not moderated.
Mr Musk's stance after several comedians began impersonating him on Twitter, leading him to announce a ban on anyone impersonating others.
Frederike Kaltheuner is the director for technology and human rights at Human Rights Watch. She said free speech should not be absolutist and requires responsible moderating.
“An absolutist view on freedom of expression doesn’t wrestle with these complex challenges – to the detriment of those on the receiving end of harmful speech,” she said.
Amnesty International has calling on Twitter to uphold its responsibilities under the
In the report, the rights group said that if left unmoderated, Twitter and other social media platforms can become a hub for sexism and racism, and can drive people off the platform, robbing them of their ability to participate in public discussions.
'Huge loss for Meta'
Professor of Internet Studies at Curtin University Tama Leaver told SBS News that like Mr Musk, Mr Zuckerberg has also made mistakes with the management of his social media giant.
"Musk has done the unthinkable and made Zuckerberg look like he managed Meta's layoffs well, but that's also not true," Professor Leaver said.
"11,000 people is a huge loss for Meta, especially when it included many internal researchers looking at misinformation, which remains a massive problem on meta platforms."
Professor Leaver said Mr Zuckerberg made a mistake over-investing in Meta's virtual reality (VR) project, which he thinks was premature.
"More bizarrely, VR leads were fired, suggesting that betting the entire company on an unrealised, not yet existing technology, such as the Meta verse, may have been a huge mistake."
Is this the end of tech ‘unicorns’?
Tech giants like Twitter and Meta are not the only companies struggling in the industry.
Tech start ups are also in decline, according to some experts.
It comes after so-called unicorn companies have seen booms in the tech space.
A unicorn company, or unicorn startup, is a private company with a valuation over US$1 billion ($1.56 billion). As of October 2022, there are over 1,200 unicorns around the world.
Popular former unicorns include Airbnb, Facebook and Google.
Professor Leaver said after a boom during the pandemic years, "tech is receding".
"The huge boom of the pandemic years, where tech was our social world, is slowing and correcting, and for an industry built on the myth of endless growth, that's going to hurt their bottom line and their stock price," he said.
"It's also pretty awful for the staff let go and the users now at more risk because moderation will be less precise."
A call for public social media platforms
James Clark is the executive director of Australian charity Digital Rights Watch. He told SBS News profits could be the reason why the social media companies are encountering backlash.
"With digital advertising revenue in decline we are seeing the dangers of letting critical social infrastructure be run by private companies for profit," he said.
"Millions of people around the world now rely on social media websites for getting their news, staying in touch with friends, building community and expressing themselves. But as long as these platforms are run for profit, the needs of users and the public good will never be the priority of these platforms."
Mr Clark said governments should start thinking about government-run, or hybrid social media platforms.
"We can’t leave something as important as our town square in the hands of big-tech companies on the other side of the planet," he said.
"We need to start imagining what publicly or cooperative owner alternatives would look like so that the future of social media is in our hands and not left to the whims of billionaires."
Twitter generated $7.8 billion in profit in 2021, while Facebook reported $73 billion.
