Mark Zuckerberg, the chief executive officer of Meta Platforms, has announced significant intentions to reorganize teams and decrease staff for the very first time in company history. These changes signal the conclusion of an era in which the social media giant saw fast expansion.
Mr. Zuckerberg said that the firm will halt recruiting and reorganize certain teams in order to save expenditures and realign priorities. This would be the first significant drop to Facebook’s budget since the company was founded in 2004. According to him, Meta will most likely be much less in 2023 than it is this year.
According to a source who was there, he made the announcement on the freeze at the weekly question-and-answer session that was held with the staff. He went on to say that the corporation will decrease funding for the majority of teams, even those that are expanding, and that individual teams would figure out how to deal with fluctuations in personnel. According to statements examined by Bloomberg, this may include not replacing posts left vacant by departing workers, moving individuals to other teams, or making efforts to manage “those who are not achieving.”
Mr. Zuckerberg said, “I had thought that by this point, the economy would have more obviously stabilized.” “However, based on what we are seeing, it does not yet seem as if it has,” which is why we want to prepare in a rather cautious manner.
The news on Thursday caused Meta stock to drop even more, bringing its loss from Wednesday’s closing price to 3.7 percent. Trading had already been negative before the day began. The price of the shares has dropped by sixty percent so far this year.
Companies like Meta that are dependent on advertising revenue are not the only ones being impacted by larger economic difficulties. Twitter imposed its own hiring restriction in the month of May, and since then, it has been pushing staff to monitor their spending and cut down on expenditures related to travel and marketing. Both Alphabet’s Google and Snap have said that they would reduce their rates of recruiting during the second half of this year. Snap laid off twenty percent of its workers in August.
The additional reduction in costs and the employment freeze are the starkest admissions that Meta has made to yet about the slowing growth of advertising income in the face of increasing competition for users’ attention.