Meta prepares for ‘winter’: Recruitment plans slashed after growth nears a standstill

Facebook parent Meta plans to slow the pace of employee hiring as revenue growth slows and inflation concerns mount.

In a statement Wednesday, a Meta spokesperson said:

We periodically reassess our talent pool based on business needs and moderate the growth of our talent pool accordingly based on our spending guidance for the current fiscal year.
However, we will continue to expand our workforce to ensure we are focused on long-term impact.

After delaying hiring of junior engineers in recent weeks, Meta intends to halt or slow hiring for most mid- and senior-level positions, according to CNBC, citing people familiar with the matter. Recruiters have begun to put some jobs on hold, the person said.

Like other tech giants, Meta has been hiring on a large scale in recent years. Its workforce has more than doubled since 2018. The company had 77,800 full-time employees at the end of the first quarter, up 28% from a year earlier.

But the company also said that there are no current layoffs and that Meta has exceeded some of its hiring goals. The company’s hiring in the first quarter of 2022 exceeded its hiring in all of 2021. Meta said that adjustments are currently underway.

The shift in hiring strategy was reported earlier by Business Insider magazine.

In its first-quarter earnings report released last week, the company reported its slowest quarterly revenue growth since going public in 2012 — revenue rose 7% year-over-year in the first quarter. As it grapples with growing competition from the likes of TikTok, while its advertising business faces headwinds. In the earnings report, Meta also predicted that second-quarter revenue could be down year-over-year.

CFO David Wehner highlighted several issues facing the company and said spending this year will be between $87 billion and $92 billion, down from a previous forecast of $90 billion to $95 billion.

Wehner said on last week’s earnings call:

Following the outbreak of the Ukraine conflict, our growth slowed further due to lower revenue in Russia and lower advertising demand in and outside Europe.
For advertisers, we believe the conflict has created further turmoil in an already uncertain macroeconomic environment.

Wehner reiterated to investors that the privacy reforms Apple implemented on its iOS devices last year will hurt the company’s growth. Meta expects to see a $10 billion decrease in revenue in 2022 as data collection suffers.

The company’s woes began to emerge last year as users abandoned Facebook’s app. In February, Meta said that its daily active users fell for the first time in a row in the fourth quarter, although the numbers recovered in the first quarter of 2022.

Still, the company’s digital media business has taken a hit in general amid macroeconomic concerns and a heightened conflict between Russia and Ukraine.

Facebook shares closed up 5% on Wednesday, but are still down 34% this year. Shares in the company have fallen more than 30% since February, which equates to a $274.6 billion loss in market value.

Meta prepares for 'winter': Recruitment plans slashed after growth nears a standstill

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