Meta said Thursday it is cutting back on hiring. The move is one of several shifts the Facebook parent company is making following a period of slower-than-usual growth.
“We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly,” said a statement provided by Meta spokesperson Andrea Beasley. The company still plans to “grow our workforce to ensure we focus on long term impact,” the statement said.
The company does not currently have plans for layoffs, but the hiring slowdown marks a reversal from aggressive workforce growth during the first three months of 2022. As of March 31, the company’s headcount was 77,805, up 28% year-over-year with 5,800 net new employee adds during the first quarter. Meta plans to slow or halt hiring for most mid- to senior-level positions, and recently also paused hiring early-career engineers. Business Insider first reported Meta’s plan to slow hiring.
Meta shares fell nearly 7% Thursday.
The announcement comes a week after Meta posted its slowest revenue growth in years during the first three months of 2022, and profits down 21% from the same period in the prior year. It is projecting revenues from the current quarter to be between $28 billion to $30 billion, which would be nearly flat compared to the $29 billion it brought in during the prior-year quarter.
Meta is in the midst of attempting to shift its strategy to focus on its plans for an augmented and virtual-reality-enabled future. The company is also facing steep competition from rivals like TikTok, lost business in Russia, difficulties monetizing crucial video content and challenges to its advertising business from privacy changes by Apple. Meta reported last week that its average price-per-ad decreased 8% year-over-year during the first quarter.
Although the company last week lowered its estimate for its full-year expenses by about $3 billion, Zuckerberg warned investors that Meta planned to slow the pace of some investments because of its current challenging growth prospects.
“After the start of Covid, the acceleration of e-commerce led to outsized revenue growth, but we’re now seeing that trend back off,” Zuckerberg said on an earnings call with analysts. “Based on the strong revenue growth we saw in 2021, we kicked off a number of multi-year projects to accelerate some of our longer-term investments … but with our current business growth levels, we are now planning to slow the pace of some of our investments.”
On the call, Zuckerberg discussed how the company would be focusing on several key areas of investment, such as short-form video and the immersive, future form of the internet the company calls the “metaverse.”
“We’re shifting the bulk of the energy inside the company toward those high priority areas,” he said. “We have a lot of awesome people here and a lot of the decisions we get to make on a day-to-day basis are: how do we direct the really talented people that are already at the company … rather than always relying on just getting more and more new people from the outside.”
Zuckerberg also said Meta hopes in the coming years to generate sufficient operating income growth from its family of apps to fund its investments in Reality Labs while still growing the company’s overall profitability, but warned about short-term challenges.
“Of course, our priority remains building for the long-term, so while we’re currently building our plans to achieve this, it is possible that prolonged macroeconomic or business uncertainty could force us to trade off against shorter-term financial goals,” Zuckerberg said. “But we remain confident in our long-term opportunities.”