Facebook intends to reduce hiring as revenue growth slows and inflation fears grow

Meta, Facebook's parent company, slowed the pace of hiring as it reported the weakest revenue growth in history and current business challenges such as changes in Apple's privacy policy and the war in Ukraine.

"We regularly re-evaluate our talent stream based on our business needs. Given the applicable spending guidelines for this revenue period, we are slowing its growth," a Meta spokesperson said to news on Wednesday. "However, we will continue to increase our workforce to ensure we focus on long-term impact."

In its earnings report last week, Meta forecasted a possible decline in year-on-year earnings in the second quarter. In addition, CFO David Wenner highlighted some of the company's issues and said spending for the year would range between $87 billion and $92 billion, lower than the previous guidance of $90 billion to $95 billion.

Meta intends to suspend or delay hiring most mid-level and senior-level positions after refraining from hiring entry-level engineers for the past few weeks. However, the man said that recruiters have begun to make gradual efforts to fill specific roles.

The battle started last year when users left the Facebook app. In February, Meta said daily active users fell for the first time in the fourth quarter, though that number rose again in the first quarter of 2022.

"The starting of the war in Ukraine, we have seen a further slowdown in growth due to declining sales in Russia and a decline in advertising demand both in Europe and outside the region," Venus said last week. "We believe that the war has added to advertisers' already uncertain macroeconomic landscape.

Wehner reiterated to investors that the privacy changes Apple introduced last year to its iOS devices would stunt growth after the company forecasted the move would cut sales by $10 billion this year.

On Wednesday, the Federal Reserve increased interest rates by half a percentage point to deal with a 40-year peak in inflation. However, the market rose as Fed Chair Jerome Powell said the central bank is unlikely to raise interest rates any higher than in the future.

Facebook shares ended the day 5% higher, although they are still down 34%.