Meta Platforms Inc, which owns Facebook, has trimmed plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees, as he cautioned them to brace for a severe economic slump.
“If I had to bet, I’d say that this might be one of the worst downturns that we’ve seen in recent history,” Zuckerberg told workers in a weekly employee Q&A session, audio of which was heard by Reuters.
According to Zuckerberg, Meta has cut its objective for hiring engineers in 2022 to about 6,000-7,000, down from an early plan to hire about 10,000 additional engineers.
Meta confirmed hiring freezes in broad terms last month, but particular details have not been disclosed. He said that, in addition to cutting hiring, the corporation was keeping certain positions empty due to attrition and “turning up the heat” on performance management to cull out employees who were unable to fulfil more aggressive standards.
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg said.
“Part of my hope by raising expectations and having more aggressive goals, and just kind of 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 OK with me,” he said.
According to an internal letter obtained by Reuters on Thursday, the social media and technology corporation is bracing for a leaner second half of the year as it deals with macroeconomic challenges and data protection hits to its ad business.
Chief Product Officer Chris Cox stated in the message, which published on the firm’s internal discussion platform Workplace before the Q&A, that the company must “prioritise more ruthlessly” and “run leaner, meaner, better executing teams.”
“I have to underscore that we are in serious times here and the headwinds are fierce. We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets,” Cox wrote.
The memo was “intended to build on what we’ve already said publicly in earnings about the challenges we face and the opportunities we have, where we’re putting more of our energy toward addressing,” a Meta spokesperson said in a statement.
The guidance is the latest approximate estimate from Meta executives, who have already reduced spending across most of the company this year in response to sluggish ad sales and user growth.
Tech companies have scaled back their ambitions across the board in anticipation of a likely US recession, however Meta’s stock price drop has been more severe than competitors Apple and Google.
The world’s largest social media corporation lost over half of its market value this year when Meta announced that daily active users on its flagship Facebook app fell for the first time in a quarter for the first time.
Its austerity push coincides with two key strategic pivots: one geared at re-fashioning its social media products around “discovery” to compete with short-video app TikTok, and the other a pricey long-term gamble on augmented and virtual reality technology.
Cox stated in his memo that Meta would need to increase the number of graphic processing units (GPUs) in its data centres fivefold by the end of the year to support the “discovery” push, which requires extra computing power for artificial intelligence to surface popular posts from across Facebook and Instagram in users’ feeds.
Meta’s TikTok-style short video product has sparked interest. Reels was rapidly expanding, according to Cox, with users tripling their time spent on the app year over year in both the United States and abroad.
He noted that Facebook accounted for almost 80% of the growth since March.
That user interaction with Reels might give a vital path to bolstering the bottom line, he added, making it critical to raise ads in Reels “as soon as possible.”
Chief Executive Mark Zuckerberg told investors in April that executives viewed Reels as “a major part of the discovery engine vision,” but at the time described the short video shift as a “short-term headwind” that would increase revenue gradually as advertisers became more comfortable with the format.
Cox noted that Meta sees revenue opportunities in business messaging and in-app shopping capabilities, the latter of which might “mitigate signal loss” caused by Apple-led privacy measures.
He stated that the company’s hardware group is “laser-focused” on launching its mixed-reality headset, codenamed “Cambria,” in the second half of the year.
(Adapted from Reuters.com)