June 30 (Reuters) – Facebook owner Meta Platforms Inc (META.O) has cut its plans to hire engineers by at least 30% this year, CEO Mark Zuckerberg told employees on Thursday as he warned them to prepare for a deep economic downturn.
“If I had to bet, I’d say this could be one of the worst downturns we’ve seen in recent history,” Zuckerberg told workers in a weekly employee question-and-answer session, the audio of which was provided by Reuters was heard.
Meta has reduced its target for hiring engineers to about 6,000 to 7,000 in 2022, down from an original plan to hire about 10,000 new engineers, Zuckerberg said.
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Meta confirmed the broad hiring pauses last month, but exact numbers weren’t previously reported.
In addition to reducing hiring, he said the company left certain positions vacant in response to attrition and “turned up the heat” on performance management to weed out employees unable to achieve more aggressive goals.
“Realistically, there’s probably a lot of people at the company who shouldn’t be here,” Zuckerberg said.
“Part of my hope in raising the expectations and having more aggressive targets and turning up the heat a bit is that I think some of you might decide this place isn’t for you, and that self-selection is OK for.” me,” he said.
The social media and tech company is preparing for a leaner second half as it copes with macroeconomic pressures and privacy hits at its ads business, according to an internal memo shown to Reuters on Thursday.
The company needs to “prioritise ruthlessly” and “run leaner, meaner and better executing teams,” Chief Product Officer Chris Cox wrote in the memo, which appeared ahead of the Q&A on the company’s Workplace discussion board.
“I have to stress that we are in serious times here and the headwinds are fierce. We need to operate flawlessly in a slower growth environment where teams shouldn’t expect a large influx of new engineers and budgets,” Cox wrote.
The memo was intended to “build on what we’ve already said publicly about the challenges we face and the opportunities we have, where we’re putting more energy into addressing them,” a meta spokesperson said in a statement .
The forecast is the latest rough forecast from meta executives, who have already moved to cut costs across much of the company this year amid slowing ad sales and user growth. Continue reading
Tech companies across the board have scaled back ambitions in anticipation of a possible US recession, although Meta’s decline was more severe than that of its peers Apple (AAPL.O) and Google (GOOGL.O).
The world’s largest social media company lost about half of its market value this year after Meta reported that daily active users on its flagship Facebook app saw its first quarterly decline. Continue reading
Its drive for austerity comes at a difficult time, and it coincides with two key strategic linchpins: One aimed to redesign its social media products around “discovery” to avoid competition from short-video app TikTok hitting back, the other was an expensive long-term bet on augmented and virtual reality technology.
In his memo, Cox said that Meta needed to quintuple the number of graphics processing units (GPUs) in its data centers by the end of the year to support the “discovery” push, which requires additional processing power for artificial intelligence to become popular posts from Facebook and Instagram in users’ feeds.
Interest in Meta’s TikTok-style reels grew rapidly, Cox said, with users doubling the time they spent on reels each year, both in the United States and globally.
About 80% of the growth since March has come from Facebook, he added.
This user interaction with Reels could be an important way to improve the bottom line, which is why it’s important to increase ads in Reels “as fast as possible,” he added.
Chief Executive Mark Zuckerberg told investors in April that executives viewed Reels as “an important part of the Discovery Engine’s vision,” but at the time called the brief video shift a “short-term headwind” that would gradually boost revenue as advertisers grew comfortable with the format.
Cox said Meta also sees opportunities for revenue growth in business messaging and in-app shopping tools, the latter of which, he added, could “mitigate signal leaks” caused by Apple-led privacy changes.
He said the company’s hardware division is “laser-focused” on the successful launch of its mixed-reality headset, codenamed “Cambria,” in the second half of the year.
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Reporting by Katie Paul; Edited by Kenneth Li, Peter Henderson and Lisa Shumaker
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