Meta CEO Mark Zuckerberg warned employees Thursday to expect cost-cutting measures in the near future, including hiring freezes and restructuring.
The parent company of Facebook, Instagram and WhatsApp has faced unprecedented economic headwinds, seeing its revenue fall year-over-year for the first time in the second quarter of this year.
(Despite the slight annual drop, Meta is still a great source of income. In the second quarter, the company informed “only” $28.8 billion in revenue).
The recession means Meta teams must expect shrinking budgets and fewer employees across the board.
“I was hoping 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 on Thursday. Thursday, according to comments obtained by Bloomberg.
“For the first 18 years of the company, we basically grew rapidly every year, and then more recently our revenues have been flat or slightly down for the first time.”
Declining digital ad revenue and competition from startups like TikTok are cutting into Meta’s bottom line at the same time Zuckerberg is trying to shift focus to the metaverse, itself a costly endeavor with no clear path to profitability. .
Meta shares fell about 4% in trading on Thursday. The stock is down nearly 60% from its 52-week high.