Meta CEO Mark Zuckerberg revealed broad plans to restructure teams and reduce staffing, which signals the end of a period of rapid progress at the social media giant.
He said the company will halt recruiting and reorganize some teams to save costs and realign priorities.
This means the firm will likely be smaller in 2023.
This would be the first significant budget reduction since Facebook’s inception in 2004.
A source told Bloomberg Zuckerberg disclosed the freeze at a weekly Q&A session with staff.
The company will reportedly cut budgets in most teams, even those that are expanding, and individual teams will figure out how to handle staff reductions.
This could include not filling vacant roles, relocating workers to different teams, or trying to “manage out people who aren’t succeeding.”
Zuckerberg said: “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.”
A Meta spokesperson declined to respond to requests for comment.
The further cost reductions and a hiring freeze are Meta’s starkest admission that advertising revenue growth is stalling in the face of increasing competition for users’ attention.
Need Career Advice? Get employment skills advice at all levels of your career
Things are challenging for the Facebook owner.
Aside from economic concerns, its advertising business, based on precise consumer targeting, lost some of its muscle due to Apple’s new privacy regulations on tracking iPhone users.
Zuckerberg is betting big on the metaverse, an immersive virtual reality future and believes that people will ultimately interact through this platform, which he has stated will be a costly endeavor for many years.
Meta said earlier this year that it planned to halt hiring for some managerial positions and postpone hiring summer interns for full-time roles.
Zuckerberg stated that the ongoing freeze was required because “we want to make sure we’re not adding people to teams where we don’t expect to have roles next year.”
He warned in July that Meta would “steadily reduce headcount growth,” and that “many teams are going to shrink so we can shift energy to other areas.”
As of June 30, Meta had over 83,500 employees and hired 5,700 new personnel in the second quarter.