Meta CEO Mark Zuckerberg announced at a weekly Q&A session that the company plans to decrease budgets across most teams and cut staff for the first time amid lingering economic concerns.
A person in attendance at the session told Bloomberg that Zuckerberg said Meta will freeze hiring and restructure some teams to cut expenses and prioritize. He said the company will likely be smaller next year than it is this year.
Zuckerberg said budgets will be cut for most teams, including those that are growing, but individual teams will decide how to implement changes in the number of staff. That could happen by not replacing employees who leave the company, moving people to other teams or seeking to “manage out” those who are not “succeeding,” according to remarks from Zuckerberg that Bloomberg reviewed.
“I had hoped the economy would have more clearly stabilized by now,” Zuckerberg said. “But from what we’re seeing it doesn’t yet seem like it has, so we want to plan somewhat conservatively.”
He said the hiring freeze is necessary because leaders want to ensure they don’t hire people to teams where they don’t expect to have positions next year.
A Meta spokesperson declined to comment but pointed to remarks Zuckerberg gave about the company’s last earnings call from two months ago. Zuckerberg said at the time that the company planned to reduce headcount growth over the next year.
“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,” he said.
The announcement comes after Meta saw its second quarter total revenues fall, down 1 percent from the second quarter of 2021. Total costs and expenses also rose by 22 percent, to $20.4 million.
Meta expects declining total revenue again at the end of the third quarter.