Meta CEO Mark Zuckerberg warned employees on Thursday to expect cost-cutting measures in the near future, including a hiring freeze and restructuring.
The parent company of Facebook, Instagram and WhatsApp has faced unprecedented economic headwinds, seeing its year-on-year revenue decline for the first time in the second quarter of this year.
(Despite the slight year-over-year decline, Meta is still a big money maker. In the second quarter, the company reported “only” $28.8 billion in revenue.)
The drop means Meta teams should expect reduced budgets and lower headcounts across the board.
“I had hoped that the economy would have stabilized more clearly now, but from what we’re seeing it doesn’t look like it has yet, so we want to plan somewhat conservatively,” Zuckerberg told staff during a question-and-answer session. answers this Thursday. in comments obtained by Bloomberg.
“For the first 18 years of the company, we basically grew rapidly, basically every year, and most recently our revenue has been flat or slightly down for the first time.”
Declining digital ad revenue and competition from startups like TikTok are denting Meta’s bottom line as Zuckerberg tries to focus on the metaverse, a costly endeavor with no clear path to profitability.
Shares of meta fell about 4% in trading on Thursday. Shares are down nearly 60% from their 52-week high.