Meta cuts hiring plans, girds itself for ‘fierce’ headwind
Facebook owner Meta Platforms Inc has cut plans to hire engineers by at least 30 percent this year, CEO Mark Zuckerberg told employees on Thursday, warning them to brace for a deep economic downturn.
“If I had to bet, I’d say this might be one of the worst recessions we’ve seen in recent history,” Mr Zuckerberg told employees during a weekly employee Q&A session, the audio of which was heard by Reuters.
Meta has reduced its target for hiring engineers to about 6,000-7,000 by 2022, compared to an initial plan to hire about 10,000 new engineers, he said.
Meta broadly confirmed staff breaks last month, but exact numbers have not been reported before.
In addition to reducing hiring, he said, the company left certain positions unfilled in response to attrition and “turning up the heat” on performance management to eliminate staffers who were unable to meet more aggressive goals.
“Realistically, there are probably a lot of people at the company who shouldn’t be here,” Zuckerberg said.
“Part of my hope of raising expectations and setting more aggressive goals, and just turning up the heat a little bit, is that I think some of you might decide that this place isn’t for you, and that self-selection is okay with me,” he said.
The social media and tech company is bracing for a lean second half of the year as it copes with macroeconomic pressures and data privacy hits for its advertising business, according to an internal memo seen by Reuters on Thursday.
The company must “prioritize more relentlessly” and “operate leaner, meaner, better-executing teams,” Chief Product Officer Chris Cox wrote in the memo, which appeared on the company’s internal discussion forum Workplace before the Q&A.
“I must underline that we are in dire times here and the headwinds are fierce. We need to perform flawlessly in a slower growth environment where teams should not expect a huge influx of new engineers and budgets,” Cox wrote.
The memo was “intended to build on what we have already said publicly about the challenges we face and the opportunities we have, where we are putting more effort into,” a Meta spokesperson said in a statement.
The guideline is the latest rough forecast from Meta executives, who have already moved this year to cut costs across much of the business in the face of slowing ad sales and user growth.
Tech companies across the board have scaled back aspirations in anticipation of a potential recession in the US, although the drop in stock price at Meta was more severe than at competitors Apple and Google.
The world’s largest social media company lost about half its market value this year after Meta reported that daily active users of its flagship Facebook app experienced a quarterly decline for the first time.
The austerity drive comes at a tricky time, coinciding with two key strategic hinges: one aimed at reshaping its social media products around “discovery” to beat competition from short video app TikTok, the other a pricey long-term bet on augmented and virtual reality technology.
In his memo, Cox said Meta should increase the number of graphics processing units (GPUs) in its data centers fivefold by the end of the year to support the “discovery” push, which requires additional computing power to make artificial intelligence popular. posts from all over Facebook and Instagram in users’ feeds.
Interest in Meta’s TikTok-esque short video product Reels grew rapidly, Cox said, with users doubling the amount of time they spent on Reels year after year, both in the United States and globally.
About 80% of the growth since March has come from Facebook, he added.
That user engagement with Reels could be an important route to amplify the bottom line, making it important to drive ads in Reels “as soon as possible,” he added.
Chief Executive Mark Zuckerberg told investors in April that executives viewed Reels as “an important part of the vision engine vision,” but described the brief video shift at the time as a “short-term headwind” that would gradually increase revenue as advertisers become more comfortable with it. the size.
Cox said Meta also saw opportunities for revenue growth in business messaging and in-app shopping tools, the latter of which, he added, could “reduce signal loss” caused by Apple-led privacy changes.
He said the company’s hardware division was “laser-focused” on the successful launch of its mixed-reality headset, codenamed “Cambria,” in the second half of the year.
