Please ensure Javascript is enabled for purposes of website accessibility

Facebook Workplace Hits 5 Million Paid Customers, Up Nearly 70% Since October

By Evan Niu, CFA – May 22, 2020 at 9:00AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Meanwhile, the social networking specialist is also shifting to remote work.

Introduced back in 2016 as a Slack competitor, Facebook's (META -1.69%) Workplace platform hasn't really made much of a dent in the massive enterprise collaboration market. To Facebook's credit, Workplace has made more gains in the past year than it had in previous trips around the sun. The platform hit 2 million paid users in February 2019, growing to 3 million by October.

Since then, the COVID-19 pandemic has caused a surge in the use of enterprise collaboration tools as companies shift to remote work (including Facebook itself). That's helped push Workplace paid users to 5 million, up nearly 70% since the last disclosure.

Workplace on a Windows PC

Image source: Facebook.

Taking aim at Zoom

Facebook announced that milestone this week, noting a few high-profile customers it has added, such as Sephora and Petco, among others. Beyond adding new customers, Facebook is seeing "significant increases" in usage and engagement from existing customers due to the novel coronavirus outbreak. As companies scramble to adapt to a new reality, videoconferencing has become indispensable to facilitating collaboration among employees working from home.

"One of the most important trends in the world of work is the shift to remote work driven by the current global pandemic," Workplace head Julien Codorniou wrote in a blog post. "We believe this is a trend that will have lasting consequences."

The social networking tech giant is introducing additional features for enterprise videoconferencing. Building upon the same infrastructure that powers Messenger Rooms, Facebook is now offering Workplace Rooms, where up to 50 workers can collaborate in virtual meeting spaces.

Zoom Video Communications (ZM -0.12%) has been among the most prominent beneficiaries of the surging demand for videoconferencing services for both consumers and the enterprise. Zoom's meteoric rise in popularity was bound to attract competition, and Facebook is clearly trying to take a bite out of that growth on both sides of the business. Both companies have poor reputations when it comes to privacy and security.

Workplace is also adding a new live-broadcasting functionality to Portal, Facebook's video-calling hardware product that is only now starting to see healthy demand after months of stagnation.

Half of Facebook employees might work remotely within the next decade

The news comes as Facebook is now embracing remote work for its own employees, signaling that it would significantly ramp up remote hiring while allowing many workers to permanently shift to working from home.

"We're going to be the most forward-leaning company on remote work at our scale," CEO Mark Zuckerberg told The Verge. "We need to do this in a way that's thoughtful and responsible, so we're going to do this in a measured way."

Zuckerberg went as far as to predict that around half of all Facebook employees could end up working remotely within the next 10 years. Presumably, they'll also be using Workplace.

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Evan Niu, CFA owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook, Slack Technologies, and Zoom Video Communications and recommends the following options: short August 2020 $130 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$140.41 (-1.69%) $-2.41
Zoom Video Communications Stock Quote
Zoom Video Communications
$74.45 (-0.12%) $0.09

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.