Meta puts freeze on new hires
Facebook-owner has instigated an unprecedented freeze on new hires in response to slowing growth and difficult market conditions.
According to internal memos seen by Business Insider, Meta has reduced its hiring targets and stopped hiring some roles completely for the rest of the year.
The unprecedented recruitment pause began a few weeks ago with entry level engineers and has been extended to most mid-level and senior-level roles.
It comes after Meta released an earnings forecast that predicted a decrease in revenues in the second quarter of this year.
Meta stocks have been on a rollercoaster ride of late, dropping 26% in February after a Q4 earnings report and jumping 18% in April when earnings came in better than expected. Currently, Meta stocks are trading at around 40% down from the highs of last September, and 34% down for the year.
The difficulties currently experienced by Meta include the continuing fallout from Apple's changes to its privacy settings, a drop-off in the use of its Facebook mobile app, people spending less time online as the pandemic eases and uncertainty caused by Russia's invasion of Ukraine.
"We experienced a further deceleration in growth following the start of the Ukraine war due to the loss of revenue in Russia as well as a reduction in advertising demand both within Europe and outside the region," said CFO David Wehner on an earnings call last week.
"We believe the war introduced further volatility into an already uncertain macroeconomic landscape for advertisers."
In addition, Meta's attempts to kickstart the metaverse, have so far proved to be a money sink, losing $2.9 billion in Q1.
Wehner said the company is still "in a strong position", and that revenue streams from monetising the Reels short video service and incorporating AI into the ad serving system, will come online shortly. He added that the hiring freeze would help Meta focus on priorities.
"In practice, this is a valuable forcing function to make sure we're prioritising more effectively and are all working on the most important things," he said in an internal memo.
The last time the company instituted a hiring freeze was at the start of the pandemic.