Social media company Meta is instituting a hiring freeze and warning employees about further restructuring and downsizing. The announcement came from CEO Mark Zuckerberg on an internal all-hands call, Bloomberg reported.
The company, which owns Facebook, Instagram, and Whatsapp, will reportedly be slashing budgets across most teams.
This announcement comes just one week after the Wall Street Journal reported certain Meta employees have been told to find new roles in the company or face downsizing. According to that report, workers on a “30-day list” had to quickly find a new role in the company or risk termination.
This is the company’s first major budget cut since the founding of Facebook in 2004 and seemingly heralds an end to the era of rapid social media growth.
Zuckerberg Points to Economic Uncertainty as Driving Factor
Meta leadership blamed current economic conditions for the cuts.
“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 in a Q&A session, according to Bloomberg.
Additionally, the company’s growth has been hindered by competition with TikTok, which is drawing users away from Instagram and Facebook.
Meta Has Been Preparing for Cuts for Months
Meta began slowing hiring in July as the company seemed to begin bracing itself for cuts. After missing its quarterly earnings target for the first quarter of 2022, Zuckerberg indicated Meta would be slowing the pace of its investments.
He also warned that some Meta teams would shrink in response to the decline in revenue and suggested the company was approaching a downturn.
This was also the first year in Facebook’s 18-year history in which the company did not grow.
Many Advertising-Driven Companies Struggling with Economic Challenges
On top of internal challenges, Meta, like many tech companies, has seen its value drop since the Federal Reserve raised interest rates on September 22.
Twitter announced a hiring freeze of its own last May and reportedly asked employees to reduce spending wherever possible. Last month, Snapchat reduced its workforce by 20%.
Even Google has not been immune. Alphabet, Inc, the search engine giant’s parent company, slowed its hiring rate in the back half of 2022.
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