Zuckerberg had warned employees in late September that Meta intended to slash expenses and restructure teams to adapt to a changing market. The Menlo Park, California-based company, which also owns Instagram and WhatsApp, implemented a hiring freeze, and the CEO said at the time that Meta expected headcount to be smaller in 2023 than it is this year.
“This is obviously a different mode than we’re used to operating in,” Zuckerberg said in a Q&A session with employees in September. “For the first 18 years of the company, we basically grew quickly basically every year, and then more recently our revenue has been flat to slightly down for the first time. So we have to adjust.”
Even with the cuts, Meta continues to expect that losses in the Reality Labs division, which houses the metaverse investments, will grow “significantly” year-over-year in 2023, the company said in a separate regulatory filing on Wednesday.
Zuckerberg has been asking investors for patience as he pours billions into his vision for the next big computing platform after mobile phones: the metaverse, a collection of digital worlds accessed through virtual and augmented-reality devices. The effort requires intensive investment in hardware and research that may not pay off for many years from now.
Meanwhile, growth at the flagship Facebook social network is stagnating. The company is working to accelerate it, and continue to add users to photo-sharing app Instagram, by experimenting with a more interest-based algorithm and short-form videos called Reels.
Now, Zuckerberg has to pull off his major corporate transitions with fewer people.