Meta has halted investments in a number of products, including teams formed early in the pandemic to compete with Zoom and build shopping features.
In addition to freezing hiring for certain engineering positions, the company also recently stopped hiring low-level data scientists.
While the hiring freeze caused employees to fear layoffs were imminent, CEO Mark Zuckerberg said in an internal meeting that there were no layoffs planned.
"I can't make a permanent promise that we won't have to reconsider that as things change," Zuckerberg said. But what I can say is that our expectation is not that we have to do this. Instead, what we basically do is we drive growth to levels that we think may be manageable over time.
In recent days, company leaders have begun telling certain teams that they will not be able to hire new engineers or receive internal transfers.
This is a sign that these specific products are not making a profit or are not of sufficient strategic importance to continue investing while Meta's share price is down 43% this year.
Product teams affected by the engineering freeze include Dating, Games, Messenger Kids and Team Merchandising. The telepresence team created during the pandemic to create video and audio calling features to better compete with Zoom has also been affected.
Joe Osborne, a spokesman for Meta, confirmed that the appointment of engineers to certain teams had been suspended. But the company is still actively hiring in machine learning and artificial intelligence jobs.
“We assess and support key priorities across the company especially in relation to our core business and reality labs,” he said in a statement.
Mark Zuckerberg reduces the possibility of dead layoffs for employees
Inside Reality Labs, which provide software and hardware for the metaverses that Zuckerberg is betting on for the company's future, chief technical officer Andrew Bosworth recently told employees that the company was moving to freeze some projects in favor of others.
Staff will not be transferred from the department, which has more than 17,000 people. No specific changes within the team have been reported internally yet.
And as Zuckerberg told employees last week, Meta was hurt by the rapid rise of TikTok. The large-scale sell-off of tech stocks and Apple's ad tracking changes cost it billions of dollars in advertising revenue.
Meanwhile, Zuckerberg tried to assure them that the company, with its balance sheet and quarterly profits in the billions, was in a strong position to go. Many on Wall Street think it could be a prolonged slump in the stock market.
"When we lower the growth targets, you hear a range of speculation about problems," he said during the comprehensive internal meeting. But I want to make it clear that we are in a very strong position and we have a very good business, and we are still growing fast.
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