Taylor Hatmaker
Thu, September 29, 2022
After a decade of explosive growth, the company formerly known as Facebook is planning to trim down. Bloomberg reports that Meta CEO Mark Zuckerberg announced plans to freeze hiring and restructure some groups within the company Thursday in an internal all-hands call.
According to Bloomberg, Meta plans to shrink budgets widely within the company, including to teams that it was recently investing in. Meta has thrown a lot of weight behind VR and creating its own metaverse in recent months and is also scrambling to build out short-form video products, like Reels, that can compete with TikTok.
Meta is far from the only tech company downsizing at the moment, but a hiring freeze still signals relatively dire times for the parent company of Facebook, Instagram and WhatsApp. While many companies in tech are battening down the hatches at the moment given a worsening global economic outlook, Meta is also grappling with fresh threats to its advertising business, most notably from iOS privacy changes implemented by Apple last year.
Zuckerberg signaled that the company was in for leaner times back in July, noting in an internal meeting that his company was approaching one of the "worst downturns that we’ve seen in recent history" and would slow hiring to prepare. Meta already selectively paused hiring within certain organizations in the company, but the universal hiring freeze marks a new era.
"I think some of you might decide that this place isn’t for you, and that self-selection is OK with me," Zuckerberg said in the internal call this summer. "Realistically, there are probably a bunch of people at the company who shouldn’t be here."
Meta reportedly suspends all hiring, warns staff of possible layoffs
Anadolu Agency via Getty Images
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Kris Holt
·Contributing Reporter
Thu, September 29, 2022
As with many other industries, the tech sector has been feeling the squeeze of the global economic slowdown this year. Meta isn't immune to that. Reports in May suggested that the company would slow down the rate of new hires this year. Now, Bloomberg reports that Meta has put all hiring on hold.
CEO Mark Zuckerberg is also said to have told staff that there's likely more restructuring and downsizing on the way. “I had hoped the economy would have more clearly stabilized by now, but from what we're seeing it doesn't yet seem like it has, so we want to plan somewhat conservatively,” Zuckerberg reportedly told employees.
The company is planning to reduce budgets for most of its teams, according to Bloomberg. Zuckerberg is said to be leaving headcount decisions in the hands of team leaders. Measures may include moving people to other teams and not hiring replacements for folks who leave.
Meta declined to comment on the report. The company directed Engadget to remarks Zuckerberg made during Meta's most recent earnings call in July. “Given the continued trends, this is even more of a focus now than it was last quarter," Zuckerberg said at the time. "Our plan is to steadily reduce headcount growth over the next year. Many teams are going to shrink so we can shift energy to other areas, and I wanted to give our leaders the ability to decide within their teams where to double down, where to backfill attrition, and where to restructure teams while minimizing thrash to the long-term initiatives.”
In an earnings report, Meta disclosed that, in the April-May quarter, its revenue dropped by one percent year-over-year. It's the first time the company has ever reported a fall in revenue.
Word of the hiring freeze ties in with a report from last week, which suggested that Meta has quietly been ushering some workers out the door rather than conducting formal layoffs. In July, it emerged that the company asked team heads to identify "low performers" ahead of possible downsizing. The company is said to have been cutting costs on other fronts, such as by cutting contractors and killing off some projects in its Meta Reality Labs division. Those reportedly included a dual-camera smartwatch.
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