- Meta is cutting hiring and laying off staff to trim costs, CFO David Wehner said Wednesday.
- He said that Meta’s headcount would remain flat between now 2023 and then.
- However, Meta will continue to pump billions into its metaverse businesses, executives said Wednesday.
Meta is cutting hiring and laying off workers to reduce costs — It will continue to invest billions in its metaverse projects, executives said Wednesday.
Meta’s third quarter earnings call featured CFO David Wehner stating that “we expect hiring to slow significantly going forward.” “We are keeping some teams flat in terms od headcount and shrinking others. We only invest in headcount growth in the highest priority areas.”
Wehner stated that Meta expects its headcount will remain flat between now 2023 and then. According to Wednesday’s third quarter earnings report, the company had 87.314 employees, an increase of 28% year-over-year.
Some Meta employees Previously told InsiderThey were worried about layoffs and some staff had begun making contingency plans.
Wehner stated that Meta’s hiring pace slowed in third quarter. There were 3,700 net hires in the third quarter compared to 5,700 in second quarter. Susan Li, Meta’s vice president of finance and incoming chief financial officer, stated that the majority of new hires were in technical and senior roles.
Meta’s metaverse will continue to burn cash
Meta’s third-quarter net loss was catastrophic 52%The company’s operating margin fell from 36% down to 20% year-over-year and to $4.4billion in the same period. As it reported its second consecutive quarter with falling revenue, the company announced a number of cost-cutting measures.
Wehner stated, “We are making significant changes across all areas to operate more efficiently.” He stated that the company had “increased scrutiny” in all areas of operating expenses. Reduce its office footprint.
Reality Labs, the Meta division that houses its metaverse and virtual-reality businesses, reported third-quarter revenue of $285 million – a drop of almost half compared with the same period in 2021. Wehner said this was due to lower Quest 2 VR headset sales.
Reality Labs reported an operating loss of $9.4 billion this year and made $10.2 billion in 2021.
Nonetheless, In 2023, the expenses of this division “will increase meaningfully.”Zuckerberg spoke Wednesday in an earnings call. He said that the “biggest driver” was the launch of a Quest headset, and the first full-year salaries for employees this year.
Wehner stated that Reality Labs operating loss in 2023 is expected to grow substantially year-over-year. “Beyond 2023 we expect to accelerate Reality Labs investments so that we can achieve the long-term goal for increasing company operating income.”
Zuckerberg said Wednesday he’s “pretty confident”The company is moving in a “good direction.”
Wall Street has pressured Meta to cut spending, particularly on its metaverse projects. Altimeter Capital’s CEO, who owns Meta shares worth hundreds of millions of dollars, spoke out on Tuesday. The social-media company was urged to reduce its metaverse investments and decrease its headcount by at most 20%It claimed that it had “lost confidence from investors”.
