Facebook co-founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee in the Rayburn House Office Building on Capitol Hill October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook’s proposed cryptocurrency Libra, how his company will handle false and misleading information by political leaders during the 2020 campaign and how it handles its users’ data and privacy.
Chip Somodevilla | Getty Images News | Getty Images
Facebook parent Meta is slowing the pace of hiring as it reckons with its weakest revenue growth on record and ongoing business challenges, such as Apple’s privacy changes and the war in Ukraine.
“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,” a Meta spokesperson told CNBC in an email on Wednesday. “However, we will continue to grow our workforce to ensure we focus on long-term impact.”
In its earnings report last week, Meta forecast a potential year-over-year revenue drop in the second quarter. CFO David Wehner highlighted several issues facing the company, and said expenses for the year would be between $87 billion and $92 billion, down from a previous forecast of $90 billion to $95 billion.
Meta intends to stop or slow hiring for most midlevel and senior-level roles, after holding off on adding entry-level engineers in recent weeks, according to a person familiar the company’s plans. Recruiters have started pausing their efforts to fill certain roles, said the person.
Insider reported on the plans earlier, citing a memo from Wehner to employees.
Struggles began to emerge last year as users abandoned Facebook’s apps. In February, Meta said its daily active users declined sequentially for the first time in the fourth quarter, though that number ticked back up in the first quarter of 2022.
Still, the digital media business broadly is taking a hit due to macroeconomic concerns and 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,” Wehner said on last week’s earnings call. “We believe the war introduced further volatility into an already uncertain macroeconomic landscape for advertisers.”
Wehner reiterated to investors that privacy changes Apple instituted on its iOS devices last year will hurt growth, after the company had already predicted the move would reduce revenue this year by $10 billion.
On Wednesday, the Federal Reserve raised its benchmark interest rate by half a percentage point in an effort to address a 40-year high in inflation. Markets moved higher, as Fed Chair Jerome Powell indicated that the central bank is unlikely to impose bigger rate hikes than that in the future.
Facebook shares ended the day 5% higher, though it’s still down 34% for the year.