Meta cuts hiring plans by around 30% due to ‘severe’ recession risks

Meta cuts hiring plans by around 30% due to 'severe' recession risks

Meta cuts hiring plans, plans for ‘fierce’ headwinds

Facebook’s CEO, Meta Platforms Inc, has cut its plans to hire engineers by at least 30% this year, Chief Executive Officer Mark Zuckerberg told employees on Thursday, as he warned them to prepare for an deep economic recession.

“If I had to bet, I would say this is probably one of the worst recessions we’ve seen in recent history,” Zuckerberg told workers during a daily employee Q&A session. week, Reuters said.

Meta has reduced its goal of recruiting engineers in 2022 to about 6,000-7,000, down from its original plan to hire about 10,000 new engineers, he said.

Meta confirmed the hiring halt last month, but exact figures have not been previously reported.

In addition to reducing hiring, he said, the company has left certain positions in place to respond to attrition and “heated up” on performance management to weed out employees who can’t meet goals. more positive.

“In fact, there’s probably a lot of people at the company who shouldn’t be here,” Zuckerberg said.

“Part of my hope by raising expectations and having more aggressive goals, and just warming up a little bit, is that I think some of you might decide that this place isn’t for you and that’s it. Self-selection is OK with me,” he said.

The social media and tech company is bracing for less of the second half of the year as it copes with macroeconomic pressures and the impact on data privacy on its advertising business, according to a report. The internal memo was published by Reuters on Thursday.

The company must “prioritize more ruthlessly” and “run teams that are leaner, more agile, and execute better,” wrote Chief Product Officer Chris Cox in the memo, which appeared on the discussion board. internal discussion of the Workplace company before the Q&A session.

“I have to stress that we are in serious times here and the headwinds are severe,” Cox wrote. We need to execute perfectly in a slower growth environment where teams don’t. should expect a large influx of new engineers and budgets,” Cox wrote.

The memo “aims to build on what we’ve said publicly in earnings about the challenges we face and the opportunities we have, where we’re putting more energy into addressing them.” , a spokesperson for Meta said in a statement.

This guide is the latest preliminary forecast coming from Meta executives, who have moved to cut costs across much of the company this year due to ad sales and user growth. slow down.

Tech companies on their boards have scaled back their ambitions to predict a possible recession in the United States, despite a more severe drop in share price in Meta than in its peers. competitors Apple and Google.

The world’s largest social media company has lost about half of its market value this year, after Meta reported that daily active users on its flagship Facebook app experienced a drop for the first time. Quarterly.

Its austerity dynamics come at a difficult time, coinciding with two key strategic goals: one to aim to reinvent its social media products around “discovery” to evaluate Beat the competition from short-video app TikTok, leaving a costly long-term bet on augmented and virtual reality technology.

In its memo, Cox said Meta will need to grow five-fold the number of graphics processing units (GPUs) in its data centers by the end of the year to support the “discovery” drive. require additional computing power for artificial intelligence to become ubiquitous. Facebook and Instagram posts in the user’s feed.

Interest in Meta’s short TikTok-style video product is growing rapidly, Cox said, with users doubling the amount of time they spend on Reels annually, both in the United States and globally, Cox said.

About 80% of the growth since March has come from Facebook, he added.

User engagement with Stories can provide a key route to solidifying profitability, with it important to ramp up ads in Stories “as quickly as possible,” he added.

CEO Mark Zuckerberg told investors in April that executives see Reels as “a major part of the discovery engine vision,” but at the time described the short video shift as a “short-term windfall” will gradually increase revenue as advertisers become more comfortable with the format.

Cox said Meta also sees revenue growth in business messaging and in-app shopping tools, the latter of which, he added, can “minimize signal loss” due to privacy changes led by Apple.

He said the company’s hardware division was “laser-focused” to successfully launch the mixed reality headset, codenamed “Cambria,” in the second half of the year.

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