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Meta cuts hiring plans by around 30% due to ‘fierce’ economic downturn risks


Meta scales down hiring plans and braces for ‘fierce’ headwinds

Facebook owner Meta Platforms Inc has cut plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees Thursday, warning them to prepare for a deep economic downturn.

“If I had to bet, I’d say this could be one of the worst downturns we’ve seen in recent history,” Zuckerberg told workers during a weekly employee Q&A session, the audio of which was heard by Reuters.

Meta has cut its goal of hiring engineers in 2022 to around 6,000 to 7,000, from an initial plan to hire around 10,000 new engineers, he said.

Meta confirmed the hiring pauses in broad terms last month, but the exact numbers weren’t previously released.

In addition to cutting hiring, he said, the company was leaving some positions open in response to attrition and “increasing the pressure” on performance management to weed out employees unable to achieve more aggressive goals. .

“In reality, there’s probably a bunch of people in the business who shouldn’t be here,” Zuckerberg said.

“Part of my hope by raising expectations and having more aggressive goals, and just turning up the heat a little bit, is that I think some of you might decide this place isn’t for you. , and that self-selection is OK with me,” he said.

The social media and technology company is bracing for a leaner second half as it faces macroeconomic pressures and data privacy breaches on its advertising business, according to an internal memo seen by Reuters on Thursday.

The company needs to “prioritize more ruthlessly” and “operate leaner, meaner, better-executed teams,” chief product officer Chris Cox wrote in the memo, which appeared on the company’s internal discussion board. the Workplace company before the Q&A.

“I have to stress that we are going through a tough time here and the headwinds are fierce. We need to execute perfectly in a slower growth environment, where teams don’t have to expect vast influxes of new engineers and budgets. “, wrote Cox.

The memo was “intended to build on what we’ve already said publicly in the findings about the challenges we face and the opportunities we have, where we’re putting more energy into resolving it,” a doorman said. -word of Meta in a press release.

The guidance is the latest rough forecast from Meta executives, who have already moved to cut costs across much of the business this year in the face of slowing ad sales and user growth.

Tech companies across the board have scaled back their ambitions in anticipation of a possible recession in the United States, although the share price decline at Meta was more severe than at rivals Apple and Google.

The world’s biggest social media company has lost around half of its market value this year, after Meta reported that daily active users on its flagship Facebook app saw a quarterly decline for the first time.

Its austerity drive comes at a delicate time, coinciding with two major strategic pivots: one to reshape its social media products around “discovery” to fend off competition from the short-video app TikTok, the another an expensive long-term gamble 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 for artificial intelligence to surface. posts from Facebook and Instagram to user feeds.

Interest in Reels, Meta’s TikTok-style short video product, was growing rapidly, Cox said, with users doubling the time they spent on Reels year-over-year, both in the United States and around the world. the world.

Some 80% of the growth since March came from Facebook, he added.

This user engagement with Reels could provide a key avenue to bolster the bottom line, making it important to boost ads in Reels “as quickly as possible,” he added.

Chief Executive Mark Zuckerberg told investors in April that executives saw Reels as “an important part of the discovery engine’s vision,” but at the time he described the short video change as a “headwind to short-term” that would gradually increase revenue as advertisers became more comfortable with the format.

Cox said Meta also saw opportunities for revenue growth in enterprise messaging and in-app purchase tools, the latter, he added, could “mitigate signal loss” created by changes in privacy led by Apple.

He said the company’s hardware division was “laser-focused” on successfully launching its mixed reality headset, codenamed “Cambria”, in the second half of the year.

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