Meta also freezes hiring and cuts costs... "First large-scale budget reduction"

Mark Zuckerberg, CEO of Meta
Photo by AP Yonhap News

[Asia Economy Reporter Jeong Hyunjin] Meta Platforms, the parent company of Facebook, has embarked on a large-scale "belt-tightening" for the first time since its establishment in 2004. As global tech companies face a worsening macroeconomic environment, Mark Zuckerberg, Meta's CEO, announced significant budget cuts, introducing hiring freezes and cost reduction measures.

According to Bloomberg and other sources on the 29th (local time), CEO Zuckerberg announced these measures during a weekly Q&A session with employees. He stated that some team restructuring and priority adjustments would be carried out to implement the hiring freeze and cost reductions. He also added that most team budgets would be reduced and that changes due to workforce adjustments would be handled within individual teams.

Zuckerberg said, "Next year, Meta will be smaller than this year." He added, "I had hoped the economy would be more stable by now, but as we are seeing, that does not seem to be the case, so we plan to be somewhat conservative." He also explained the reason for the hiring freeze, saying, "We do not expect to have positions to add staff to teams next year."

Bloomberg described this as "the first large-scale budget cut since Facebook's founding in 2004," noting that "cost reductions and hiring freezes reflect Meta's harsh acknowledgment of slowing advertising revenue growth amid intensified competition for users."

As of June 30, Meta's workforce numbered 83,500 employees. Approximately 5,700 new hires were added in the second quarter. Earlier this year, Meta announced it would slow hiring for some key positions and delay offering full-time jobs to summer interns. In July, Zuckerberg warned that Meta would continue to reduce its workforce growth, stating, "Many teams will shrink, and we may move people to other areas."

Following the announcement from CEO Zuckerberg, Meta's stock price fell 3.67% that day.

This announcement from Meta comes as global tech companies are cutting costs amid ongoing inflation and recession concerns affecting the macroeconomic environment this year. On the same day, Amazon, the world's largest e-commerce company, decided to close all but one of its call centers in the U.S. as part of cost-saving efforts. Hundreds of call center employees will work from home. Google also announced it would shut down Stadia, its video game service launched in 2019, citing a lack of user interest.