Facebook plans to reduce hiring as revenue growth slows and inflation concerns increase

Meta, the parent company of Facebook, is reducing hiring as it deals with its lowest revenue growth on record and significant business issues such as Apple’s privacy restrictions and the situation 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.”

Meta forecasted a probable year-over-year revenue reduction in the second quarter in its quarterly release last week. CFO David Wehner discussed many difficulties confronting the corporation and predicted that spending for the year will be between $87 billion and $92 billion, down from a previous prediction of $90 billion to $95 billion.

According to a person familiar with the company’s plans, Meta wants to cease or slow hiring for most midlevel and senior-level positions, after holding off on hiring entry-level engineers in recent weeks. According to the source, recruiters have begun to pause their efforts to fill specific posts.

Insider has previously reported on the intentions, citing a message from Wehner to staff.

Last year, problems began to appear as users abandoned Facebook’s apps. In February, Meta reported that its daily active users fell sequentially for the first time in the fourth quarter, while the figure increased in the first quarter of 2022.

Nonetheless, the digital media industry as a whole is suffering as a result of macroeconomic concerns and Russia’s invasion of Ukraine.

Wehner told investors that Apple’s privacy changes on iOS devices last year will hurt growth, despite the company’s previous prediction that the move would lower revenue by $10 billion this year.

The Federal Reserve hiked its benchmark interest rate by half a percentage point on Wednesday in an effort to combat a 40-year high in inflation. Markets rose as Fed Chair Jerome Powell said the central bank is unlikely to impose larger rate hikes in the future.

Facebook shares finished the day 5% higher, but are still down 34% year to date.