Facebook parent Meta to freeze hiring amid revenue growth slowdown
Meta added over 5,800 net new hires in the first quarter of 2022
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RBC Capital Markets managing director Brad Erickson discusses where Meta can find growth in the coming years.
Facebook parent Meta Platforms is planning to halt or slow down hiring for most mid-to-senior level positions as the tech giant faces headwinds both domestically and abroad.
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The company's recruiters have already begun the process of pausing tech screens and interviews for some roles, with a few exceptions, in fairness to candidates and to minimize the burden on its interviewers.
"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 spokesperson for Meta told FOX Business in a statement. "However, we will continue to grow our workforce to ensure we focus on long term impact."
Meta notes its hiring efforts are currently outpacing active recruiting goals based on volume and changing business demand in a post-pandemic market.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| META | META PLATFORMS INC. | 592.83 | +18.51 | +3.22% |
The move follows the company's recent pause on hiring entry-level engineers. Meta emphasized that there are no planned layoffs.
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Meta earned $7.47 billion, or $2.72 per share, during the first quarter of 2022, down 21% from $9.5 billion, or $3.30 per share, in the same period a year earlier. Meanwhile, revenue rose 7% to $27.91 billion from $26.17 billion — the slowest growth rate in a decade for the online advertising powerhouse that generally reports sales growth in the double digits.
During the quarter, Meta added over 5,800 net new hires, the majority of which were in technical functions. The figure is more than the entirety of the company's hiring during 2021. As a result, Meta's headcount grew 28% year over year to a total of more than 77,800 full-time employees.
In this Oct. 25, 2019 photo Facebook CEO Mark Zuckerberg speaks at the Paley Center in New York. (AP Photo/Mark Lennihan) ((AP Photo/Mark Lennihan) / AP Newsroom)
On the company's latest earnings call, Meta executives warned analysts about a series of headwinds impacting the company's revenue growth, including the ongoing conflict between Russia and Ukraine.
"We've been blocked in Russia and we decided to stop accepting ads from Russian advertisers globally," Meta CEO Mark Zuckerberg said. "We've also seen effects on business globally following the start of the war."
Meanwhile, Apple's recent iOS privacy changes, which limit Meta's ad-tracking capabilities, are expected to cost the company about $10 billion this year.
Zuckerberg also cited "volatility" in Meta's attrition, but downplayed concerns of a potential employee exodus.
"I think we're doing okay now," Zuckerberg said. "I don't necessarily think that periods like this, where we're prioritizing a little bit more where we're focusing and growing is going to be unhealthy over the long term. I actually think it's going to make us a better company."
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Looking ahead, the company expects total second-quarter revenue for 2022 in the range of $28 billion to $30 billion.
Total expenses are expected to be in the range of $87 billion to $92 billion, down from previous guidance of $90 billion to $95 billion, primarily driven by the Family of Apps segment, followed by Reality Labs.
Insider was the first to report the hiring freeze.
Shares of Meta are down nearly 40% year-to-date as of the time of publication.