Macroeconomic pressures have pushed Meta to implement a hiring freeze.
Meta's CEO also announced the tech giant's first budget cut since it was founded in 2004.
What will Meta's headcount look like in 2023?
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A looming recession and the cost of living crisis is not just affecting individuals and their ability to pay their bills at the end of the month. It is also disrupting businesses, and particularly their advertising budgets.
As a result of these macroeconomic pressures, tech giant Meta reported its first quarterly revenue drop since the company was founded in 2004. And this is forcing the company to make difficult decisions about hits headcount.
In a July earnings call, CEO Mark Zuckerberg noted: “Given the continued trends, this is even more of a focus now than it was last quarter.
“Our plan is to steadily 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”.
Inside the first ever budget cuts at Meta
Zuckerberg has now expanded on these comments and outlined plans to make budget cuts at Meta for the first time ever, according to Bloomberg.
During a weekly Q&A session with employees, the CEO shared that Meta is implementing a hiring freeze, as well as restructuring some teams in order to realign priorities. The main business priorities for Meta will be Reels, its challenger to TikTok, and the metaverse.
As a result, Meta’s headcount will be smaller in 2023. “For the first 18 years of the company, we basically grew quickly basically every year, and then more recently our revenue has been flat to slightly down for the first time,” Zuckerberg told staff.
Most teams will see budget cuts, and individual teams will be in charge of any restructuring, including layoffs or shifting people to new teams.
Bloomberg reported that Zuckerberg said: “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.”
The hiring freeze was confirmed by an internal memo sent to staff by Lori Goler, Meta’s head of people, which was seen by the Financial Times.
She wrote that the company would “pause sourcing candidates and will not make any offers until the freeze is lifted later this year”.
Goler added: “Each org leader is working through their exact plans for next year, but it’s important to pause recruiting and not bring new people into teams while they do this work.
“Providing this stability will make sure we don’t put people into roles that may change or disappear.”
UNLEASH has reached out to Meta for a comment. Meta did not comment on the latest update, and just referred UNLEASH to Zuckerberg’s July comments quoted above.
Stay tuned to find out how this hiring freeze and budget reduction at Meta will play out – will it turn into a large-scale layoff?
