Indeed, the company’s profits fell 21%, while revenue, at $27.9 billion, grew only 7% (too slow growth for Meta). Faced with this situation, Zuckerberg has therefore announced that his company will reduce its expenses.
And apparently, as part of these spending cuts, the group will end its hiring spree for the rest of the year. According to a Business Insider article, this was announced by David Wehner, the chief financial officer, in a note sent to employees.
“While we are optimistic about the opportunities ahead, we need to ensure that we are making targeted and balanced investments to support our most strategic priorities. We are facing headwinds, including slower-than-expected revenue growth at the start of the year”Wehmer reportedly said in his memo.
He would have attributed this situation to the changes on iOS, to the war in Ukraine, and to the macroeconomic environment in general. Also, growth is slowing as people return to normal lives and spend less time online.
As a reminder, with regard to iOS, Apple announced a new feature called ATT or App Tracking Transparency in 2020. Deployed in 2021, this requires applications to request the user’s permission, via a dialog box, before to access an identifier called IDFA. However, this identifier is the tool that apps and advertisers use to display relevant advertisements based on users’ interests.
Meta had campaigned against the rollout of this feature on iOS. And when it arrived, the group began to discuss the impact on its income.
In any case, despite this situation, Meta remains optimistic and is already talking about how the group could reaccelerate its growth. According to the note shared by Business Insider, regarding iOS, Meta plans to incorporate artificial intelligence into its advertising system to compensate for the loss of signals (the signals used for advertising) due to changes on iOS. .
In any case, the fact that Meta cites these changes among the main causes of its poor results demonstrates the effectiveness of the measures taken by Apple. And the group may not be at the end of its troubles since, for its part, Google is also considering cracking down on individual tracking for advertising purposes on Android. However, before that, the Mountain View company will have to offer technology that will fight against tracking, while allowing developers to continue to monetize their apps.
Meta forced to slow down recruitment due to loss of revenue growth
At the beginning of the year, Meta had planned massive recruitments. “We entered 2022 with really aggressive growth targets and have been hiring at an incredible pace this year so far – we have hired more engineers in the first quarter than in all of 2021”the financial manager of Meta would have explained to the employees.
But because of the headwinds, the group will revise its recruitment ambitions downwards for the rest of the year. Wehmer also reportedly warned that these changes will affect all teams in the group. ” […] it will be an opportunity to reprioritize work to ensure we are all focused on the things that matter most and the top priorities of the business”would also have written the financial manager in his note.
In addition, Meta would also review the distribution of its workforce, to ensure that it is aligned with the priorities of the group.