The news: A leaked memo shows a hiring freeze at Meta for the rest of 2022 that will affect “almost every team.” This, and the company’s plan to cut investments, could delay the rollout of its ambitious metaverse plans.
More on this: Insider previously reported that Meta had paused hiring certain levels of engineers, but the current hiring freeze will "affect hiring goals for almost every team across the company," CFO David Wehner said in the memo.
- The company cites the invasion of Ukraine, data-privacy clampdowns on iOS devices, and an "industry-wide downturn" as reasons for the hiring freeze, per Protocol.
- Ad sales growth at Facebook plummeted in Q1 to the lowest level since the company went public a decade ago.
- Meta’s stock price has declined by 40% since the start of 2022, and employees say that Facebook’s business is plateauing and that it could be the next Yahoo.
- The leaked memo contradicts an earlier announcement from Meta CEO Mark Zuckerberg that said the company is hiring 10,000 people in Europe to help build the metaverse.
- Meta is also cutting back on investments, specifically for its nascent metaverse VR ecosystem. In context, Meta invested $10 billion in the metaverse last year.
The problem: After its monumental rebranding and metaverse pivot, the company formerly known as Facebook was bullish on all things VR. Its enthusiasm was contagious—it seems the entire tech industry had to reveal their metaverse pivots as well.
Why this could backfire: Meta on a hiring freeze months after refocusing its brand and company could be seen as a warning signal that now may not be the right time to shift to the metaverse.
- A hiring freeze at any company is a warning to employees and investors that possible restructuring or job cuts are on the horizon. This could dissuade tech workers wanting jobs at Meta when interest in metaverse careers are at an all-time high.
- After drumming up interest in all things VR, Meta has a limited runway on which to cash in on its momentum or its efforts could be dismissed as vaporware.
- Competing metaverses in gaming, social networking, work, and productivity, can seize the narrative—and the talent—while Meta seemingly flounders.
The big takeaway: Meta is struggling to sustain its legacy ecosystem in Facebook, which, if it continues to lose money, would delay necessary hiring and funding of its future metaverse expansion.