Meta Chief Executive Mark Zuckerberg warns employees of hiring suspensions and possible cutoffs to rein in costs and make way for corporate restructuring.
Meta Platforms Inc., formerly known as Facebook Inc., is looking to institute a hiring freeze and downsizing as a result of the global economic slowdown, Engadget reports.
Employees are Facing the Consequences of ‘Planning Conservatively’
On Thursday, Meta made the announcement about its plans to shrink its 2023 budget as it grapples with digital threats in business and advertising, warranting the pause in team recruitments.
The Wall Street Journal writes that the company foresees that the budget for manpower will be ‘very tight’ in order to prioritize the pivot in internal restructuring and department reorganizations, which limits roles within Meta.
“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,” Zuckerberg tells The Wall Street Journal.
With this, employees may see transfers to other teams, trims within ranks, and non-replacements for vacated positions over the next year. However, according to workers, a ’30-day list’ of employees at risk of termination had already been released.
Although unusual, this move by the multibillion-dollar tech conglomerate comes to no one’s surprise as the social media company had already been ringing the bells on the matter since earlier this year, says The Guardian.
Economic Uncertainty Drives Zuckerberg to Make Cuts
Incurring around $71 billion in losses in 2022, Meta blames the macroeconomic environment conditions for the company’s first-ever decline in revenue, prompting budget redirections.
“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 told employees, according to an article by Bloomberg.
With growing competition in the social media space, users have been drawn away from Facebook as Tiktok and Instagram have risen in popularity in recent times.
It’s Not Only Meta That Suffers From the Economic Downturn
The slowdown in the tech industry during the recent months has also seen value drops since the Federal Reserve raised its interest rates on September 22 with advertising-driven companies.
Search Engine Journal writes that Twitter also announced its own hiring freeze in May as a result of these economic challenges, asking employees to reduce possible spending costs. Connectedly, Snap Inc., the owner of Snapchat, also cut its workforce by 20%.
Meta’s biggest tech rival Alphabet Inc., Google’s parent company, also started its hiring freeze and employee layoffs on July 20 as an effort to cut back on projects. Launched in 2019, the videogame streaming service Stadia is first to shut down on Thursday due to a lack of users.
Similarly, Apple is following in their footsteps and will be implementing slow hiring starting in 2023, according to The Guardian.