Dhe Facebook parent company Meta feels compelled to put even more pressure on the brakes on costs. CEO Mark Zuckerberg announced tougher austerity measures at a staff meeting on Thursday. As reported by the Bloomberg news agency, this includes a hiring freeze and a reduction in budgets for most teams at the company, including those that are still growing. Zuckerberg said: “I was hoping the economy would have stabilized more significantly by now. But as far as we can see, that doesn’t seem to be the case, so we want to plan a bit conservatively.” Meta will be “a little smaller” by the end of 2023. The company, which has almost always grown rapidly since it was founded in 2004, now apparently sees itself on a shrinking course.
Zuckerberg’s announcement comes at a time when Meta is struggling with a significant slowdown in its business. In July, the group reported a decline in sales for the first time in its history, and at the time it also warned of a minus for the current quarter. Meta makes most of its revenue from online advertising, and that business has stalled amid a deteriorating economic environment. There are also challenges beyond macroeconomic factors. Meta is struggling with the increasing competition from the smartphone app Tiktok. Another burden is changed data rules by the electronics group Apple, which has made it more difficult for apps like Facebook to collect user data on its devices. Meta expects this alone to cost ten billion dollars in sales this year.
Zuckerberg wants to sort out
At the staff meeting, Zuckerberg gave the clearest signal so far that less comfortable times have dawned for the workforce. In the past few months, however, he has repeatedly made it clear that he wants to save more. The company already reduced its forecast for costs this year in April and lowered it again in July. Costs are now expected to be between $85 billion and $88 billion, the original forecast was between $90 billion and $95 billion. In July, Zuckerberg said at a staff meeting that Meta plans to hire significantly fewer software developers this year than initially planned.
Even then, he was very pessimistic about macroeconomic developments and said: “If I had to bet, I would say this downturn could be one of the worst in recent history.” At the time, he also announced more aggressive performance targets for the workforce and want to sort out employees: “Realistically, there are probably some people in the company who shouldn’t be here.” who are unsuccessful”.
Meta isn’t the only company to adopt austerity measures after years of rapid growth. The online platform Twitter, which agreed to sell it to Tesla CEO Elon Musk this year, has also imposed a hiring freeze and laid off employees in its human resources department. Snap, the parent company of Facebook competitor Snapchat, announced a few weeks ago that it would be separating around 20 percent of its employees.
Internet giant Google said in July it would slow down the pace of hiring this year. CEO Sundar Pichai also sent out a remarkable fire letter at the time, urging his workforce to step up: “Going forward, we need to be more entrepreneurial, work with greater urgency, sharper focus and more hunger than we’ve shown on sunnier days.”
Just last week, Pichai faced critical questions from his colleagues at a staff meeting about his recent austerity measures. According to a report by the CNBC television network, employees complained that Google had cut budgets for travel and other things. Pichai is said to have sounded annoyed at times in his answers, the report said. “I hope you’re all reading the news,” he reportedly said. Google is trying to be “a little more responsible” in tough macroeconomic conditions. And having fun at work should not only depend on having large budgets at your disposal. Unlike Meta, Google’s parent company Alphabet reported double-digit revenue growth in its most recent fiscal quarter.
