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Meta says it’s laying off staff and easing off hiring to reduce costs – but will keep pumping billions into Mark Zuckerberg’s metaverse

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15 February 2020, Bavaria, Munich: Mark Zuckerberg, Chairman of Facebook, speaks at the 56th Munich Security Conference
Meta CEO Mark Zuckerberg.

  • Meta is reducing hiring and laying off staff to trim costs, CFO David Wehner stated Wednesday.
  • Meta’s headcount will stay roughly flat between now and the tip of 2023, he stated.
  • But Meta will proceed pumping billions into its metaverse enterprise, execs stated Wednesday.

Meta is reducing hiring and laying off staff to reduce costs — but will keep pumping billions of dollars into its metaverse projects, executives stated Wednesday.

“We expect hiring to slow dramatically going forward,” CFO David Wehner stated in Meta’s third-quarter earnings name. “We are holding some teams flat in terms of headcount, shrinking others, and investing headcount growth only in our highest priorities.”

Meta expects its headcount to stay roughly flat between now and the tip of 2023, Wehner stated. The firm had 87,314 workers as of September 30, a 28% improve year-over-year, in accordance to its third-quarter earnings report, revealed Wednesday.

Some Meta workers previously told Insider they had been involved about layoffs, and that some staff had began making contingency plans.

Wehner stated Meta’s tempo of hiring had slowed within the third quarter, with 3,700 web new hires in contrast with 5,700 within the second quarter. New hires had been largely concentrated in technical and senior roles, Susan Li, Meta’s VP of finance and incoming CFO, stated.

Meta’s metaverse will keep burning money

Meta’s third-quarter web revenue crashed 52% year-on-year, to $4.4 billion, and its working margin plummeted from 36% to 20%. The firm on Wednesday introduced a sequence of measures to lower costs because it reported its second consecutive quarter of falling income.

“We are making significant changes across the board to operate more efficiently,” Wehner stated. The firm had “increased scrutiny” on all areas of working bills, he stated, together with reducing its office footprint.

Reality Labs, the Meta division that homes its metaverse and virtual-reality companies, reported third-quarter income of $285 million – a drop of just about half in contrast with the identical interval in 2021. Wehner attributed this to decrease gross sales of its Quest 2 VR headset.

Reality Labs made an working lack of $10.2 billion in 2021 and has reported $9.4 billion in working losses to date this yr.

Nonetheless, the division’s expenses will “increase meaningfully” in 2023, Zuckerberg stated in Wednesday’s earnings name, with the “biggest drivers” being the launch of a brand new Quest headset and the primary full-year salaries of staff employed this yr.

“We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” Wehner stated. “Beyond 2023, we expect to pace Reality Labs investments such that we can achieve our goal of growing overall company operating income in the long run.”

Zuckerberg stated Wednesday he is “pretty confident” the corporate is heading “in a good direction.”

Meta has been underneath stress from Wall Street to reduce spending, particularly on its metaverse initiatives. On Tuesday, the CEO of Altimeter Capital, which owns a whole lot of thousands and thousands of {dollars}’ price of Meta shares, urged the social-media company to cut back on its metaverse investments and reduce its headcount by at least 20%, saying it had “lost the confidence of investors.”

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