Meta (Facebook) stops hiring, next step are layoffs?
Meta CEO Mark Zuckerberg told staff he is freezing new hires and plans to take further cost-cutting measures
Meta Platforms, Facebook's parent company, will freeze hiring.
Bloomberg News first revealed this on Thursday, citing a communication from Mark Zuckerberg, CEO of the Menlo Park group, to employees. Furthermore, according to the CEO, the company will restructure further given the uncertain macroeconomic situation.
"Several tech companies have been forced to drastically cut headcount in recent months as advertisers cut spending to prepare for a looming recession," Reuters said. Google, Microsoft and Apple have announced that they have slowed down their hiring plans for the year, in some cases adopting partial hiring freezes. Earlier this month Snap, the company that heads the Snapchat platform, instead announced the layoff of 20% of its staff of more than 6,000 employees. Before that, Netflix had fired about 150 employees due to "business needs," the leading video streaming company said in May .
The social media company Zuckerberg founded had also cut plans to hire engineers by at least 30% this year, press reports reported in June. Already on that occasion Zuckerberg had warned the staff to prepare for a deep economic recession.
Also, according to Bloomberg 's report, yesterday Zuckerberg added that the social giant will end up in 2023 as a "somewhat smaller" organization. “After a decade of explosive growth, the company formerly known as Facebook is planning to shrink,” comments TechCrunch .
Next step are the layoffs?
THE COMMUNICATION OF THE CEO ZUCKERBERG TO THE EMPLOYEES
Yesterday CEO Zuckerberg said Meta will cut budgets on most teams and that individual teams will need to manage staffing changes, the Bloomberg report added.
"I had hoped the economy had stabilized by now, but from what we're seeing it doesn't look like it yet, so we want to plan a little cautiously," Zuckerberg told employees according to Bloomberg reports.
A ROUTE ALREADY TAKEN
Meta declined to comment on the Bloomberg report. The company had confirmed its hiring freeze in general terms in May, but no exact figures had previously been reported.
In July, CEO Mark Zuckerberg announced plans to "steadily reduce headcount growth over the next year" and that he would delegate downsizing decisions to individual team leaders. According to an Axios indiscretion in mid-September, Meta was merging the business integrity division with the central integrity division.
THE DIFFERENCES WITH OTHER BIG TECH
Finally, "Meta is the latest technology company to move from slower hiring to a total block," Axios points out.
As noted at the outset, numerous tech companies have scaled back their ambitions in anticipation of a possible US recession. Google's parent company Alphabet announced a hiring freeze starting July 20, and Apple said it will start slowing hiring starting in 2023.
Although the drop in Meta's share price was more severe than its competitors Apple and Google, Reuters points out.
The largest social media company in the world lost around half its market value this year, after Meta reported that daily active users on its flagship Facebook app experienced a quarterly decline for the first time. The company is also grappling with new threats to its advertising business, most notably from the iOS privacy changes Apple implemented last year.
Its push for austerity comes at a difficult time, coinciding with two important strategic pivots according to Reuters . One aimed to reshape its social media products around the "discovery" to fend off competition from the TikTok short video app. The other is about an expensive long-term bet on augmented and virtual reality technology.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/meta-facebook-stoppa-le-assunzioni-prossimo-passo-i-licenziamenti/ on Fri, 30 Sep 2022 08:19:29 +0000.