Mark Zuckerberg Prescribes Meta Shrinkage Course

Dhe Facebook parent company Meta feels compelled to put even more pressure on the brakes on costs. The 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 are changed data rules of the electronics company Apple, the apps like Facebook made it difficult 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 announced its sale to Tesla CEO this year Elon Musk has imposed a hiring freeze, she has also laid off employees in her 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.

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