Zuckerberg said the company has essentially grown rapidly every year for the past 18 years, and then recently revenues have been flat or slightly down for the first time. From what we’ve seen, the U.S. economy hasn’t plateaued yet, so hopefully, the plan is to start getting a little more conservative.
On Thursday, Sept. 29, Meta Platform Chairman and CEO Zuckerberg announced during his regular weekly meeting with employees that Meta is freezing hiring, will restructure its staff and team, cut costs and shift priorities.
Zuckerberg announced the social networking company’s freeze during a weekly question-and-answer session with employees, according to an attendee. Meta’s further cost-cutting and hiring freeze were its clearest statements. Meta’s revenue pillar, advertising revenue growth, is slowing at the moment amid growing competition for users, and Meta said earlier this year that it plans to slow hiring for some management positions and delay giving out full-time jobs to summer interns. Zuckerberg warned in July that Meta would “steadily reduce headcount growth” and that “many teams will be scaled back so we can shift our efforts to other areas.
Meta shares fell 4% during the day after the news broke, approaching their recent lows. The stock eventually closed down 3.67% at $136.41.
Zuckerberg said:
"We basically grew rapidly every year for the first 18 years of the company's existence, and then recently our revenues were flat or slightly down for the first time. I had hoped that by now the economy would have stabilized more significantly, but from what we've seen, it doesn't seem to have, so we're hoping to plan to start getting a little more conservative."
Meta’s internal priorities include Reels on Instagram, which Meta released in the short-form video space to compete with TikTok, and Zuckerberg’s plans for the future of the Internet, known as the metaverse. In a previous move to reduce spending, the company’s dual-camera watch, made to compete with the Apple Watch, was shut down.
As of June 30, Meta had more than 83,500 employees and added 5,700 new hires in the second quarter.
Last week, media reports said Meta began quietly laying off employees by reorganizing its departments while allowing “reorganized” employees to apply for other positions within the company.
Zuckerberg had hinted back in June that Meta might not be expanding rapidly in terms of hiring again.
"In fact, there are probably a lot of people in the company who shouldn't be here."
On Thursday, most tech leaders also plunged, with the exception of Meta.
Growth tech stocks sensitive to interest rates plunged. Among the leading tech stocks, Tesla fell more than 7% intraday, led by its sector, and Apple fell more than 5% intraday after being downgraded by Bank of America from Buy to Neutral and cut its price target due to weaker iPhone demand. The Nasdaq closed down 2.84% at 10,737.51 points, a new closing low since June 16, approaching the low set on June 16 since September 2020.
