Meta reduces hiring plans and braces for ‘fierce’ headwinds

Facebook-owned Meta Platforms Inc has curtailed plans to hire engineers by at least 30% this year, according to CEO Mark Zuckerberg, who also advised employees to brace for a severe economic slump. “If I had to bet, I’d say this may be one of the worst downturns in recent history,” Zuckerberg said during a weekly staff Q&A session.

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 fulfill more aggressive standards.

“There are probably a bunch of people at the company who shouldn’t be here,” Zuckerberg said. “Part of my hope is that by raising expectations, having more aggressive goals, and just kind of turning up the heat a little bit, 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 memo obtained by Reuters on Thursday, the social media and technology company is bracing for a leaner second half of the year as it deals with macroeconomic pressures and data privacy hits to its ad business.

Chief Product Officer Chris Cox wrote in the memo, which appeared on the company’s internal discussion forum Workplace before the Q&A, that the company must “prioritize more ruthlessly” and “operate leaner, meaner, better executing teams.”

“I must emphasize that we are in serious circumstances here, and the headwinds are strong.” We must execute flawlessly in a slower-growth environment, where teams should not expect large influxes of new engineers and budgets,” Cox wrote.

A Meta spokeswoman said in a statement that the memo was “designed to build on what we’ve previously said publicly in earnings about the problems we have and the possibilities we have, which we’re devoting more of our focus toward addressing.”

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.

In anticipation of a future US recession, tech companies have scaled back their expectations across the board, though Meta’s stock price has fallen more precipitously 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.

Cox stated in his memo that Meta would need to increase the number of graphic processing units (GPUs) in its data centers 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 an 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.

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 said Meta also saw possibilities for revenue growth in business messaging and in-app shopping tools, the latter of which, he added, could “mitigate signal loss” created by Apple-led privacy changes.

He said the company’s hardware division was “laser-focused” on successfully launching its mixed-reality headset, code-named “Cambria,” in the second half of the year.