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Facebook plans to cut hiring as revenue growth slows

Facebook Co-Founder and CEO Mark Zuckerberg testifies before the House Financial Services Committee at the Rayburn House office building on Capitol Hill on October 23, 2019 in Washington, DC. Zuckerberg testified about Facebook’s Libra cryptocurrency proposal, how his company will deal with false and misleading information from political leaders during the 2020 campaign, and how it handles its users’ data and privacy.

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Facebook’s parent company Meta is slowing the pace of hiring due to its weakest-ever revenue growth and ongoing business challenges, such as Apple’s privacy changes and the war in Ukraine.

“We regularly reassess our talent pool based on our business needs and in light of the spending guidance given for this revenue period, we are slowing its growth accordingly,” a spokesperson for Meta told CNBC on Wednesday in a statement. E-mail. “However, we will continue to grow our workforce to ensure we are focused on long-term impact.”

In its earnings report last week, Meta predicted a potential decline in year-over-year revenue in the second quarter. Chief Financial Officer David Wehner pointed to several issues facing the company and said spending for the year would be between $87 billion and $92 billion, down from a previous forecast of $90 billion to $95 billion.

Meta intends to halt or slow down hiring for most mid-level and senior positions, after delaying the hiring of junior engineers in recent weeks, according to a person familiar with the company’s plans. . Recruiters have begun suspending efforts to fill certain positions, the person said.

Insider reported on the plans earlier, citing a memo from Wehner to employees.

Struggles began to emerge last year when users abandoned Facebook’s apps. In February, Meta said its daily active users declined sequentially for the first time in the fourth quarter, although that number increased in the first quarter of 2022.

Yet, the digital media sector is largely affected due to macroeconomic concerns and Russia’s invasion of Ukraine.

“We experienced a further deceleration in growth after the start of the war in Ukraine due to the loss of revenue in Russia as well as reduced advertising demand both in Europe and outside the region,” Wehner said on last week’s earnings call. “We believe the war has introduced additional volatility into an already uncertain macro landscape for advertisers.”

Wehner reiterated to investors that the privacy changes Apple instituted on its iOS devices last year will hurt growth, after the company previously predicted the move would cut revenue this year by $10 billion.

On Wednesday, the Federal Reserve raised its benchmark interest rate by half a percentage point in a bid to tackle a 40-year spike in inflation. Markets rose as Fed Chairman Jerome Powell indicated that the central bank is unlikely to impose larger rate hikes than this in the future.

Facebook shares ended the day up 5%, though they are still down 34% for the year.

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