(San Francisco) In May, Meta CEO Mark Zuckerberg froze hiring for engineers and data scientists. In July, he warned employees they had to tackle an “intense period” of 18 to 24 months and asked managers to identify underperforming employees. This week, he announced that the company will freeze hiring and cut budgets, which will lead to layoffs.
Posted at 5:00 p.m.
This is the most recent sign of the difficulties facing the company formerly known as Facebook. For years, Meta has delivered record growth, impressing its investors with its ability to exceed financial forecasts and generate revenue. But this year, quarterly earnings reports have been less rosy as Meta grapples with upheaval in the global economy as well as competitive and regulatory threats.
The hiring freeze was reported earlier this week by Bloomberg.
Mr. Zuckerberg made the announcement during his weekly Q&A session with employees. According to employees who attended the meeting, Mark Zuckerberg said he had to plan cautiously to account for the company’s declining revenue.
Meta officials have been told to reduce their budgets, either by not filling vacancies or by reducing the number of their employees.
A Meta employee, who asked not to be named because employees are not allowed to speak to reporters, said managers had already begun to identify low-performing employees by subjecting them to an “assessment” process. performs “. If employees did not find roles in other teams, they could lose their jobs with the company.
Meta declined to comment, but a company spokesperson referred a reporter to the public remarks Zuckerberg made in July.
“Our plan is to gradually reduce the growth in the number of employees over the next year,” Zuckerberg said during an earnings conference call with investors in July. “Many teams are going to be reduced so that we can transfer our energy to other areas. »
Meta has shown signs of a financial downturn for most of the year as it embarks on an aggressive move to offer products for the nascent metaverse — an area that Zuckerberg says represents the future of his company, which largely remains to be proven.
In its latest quarter, Meta reported a 1% drop in quarterly revenue compared to the same quarter a year earlier. It was the first time the social media giant’s revenue had fallen since it went public a decade ago.
Revenue for the quarter amounted to US$28.82 billion, compared to US$29.07 billion a year earlier. The profit amounted to 6.69 billion US, a decrease of 36% compared to the previous year. Wall Street analysts had forecast profits of $7.04 billion on revenue of $28.9 billion, according to data compiled by FactSet.
This article was originally published in the New York Times.