July 29, 2022: -On Wednesday, Meta Platforms CEO Mark Zuckerberg said at the company’s second-quarter call that the economizing seems to be in a downturn that will break digital advertising, so the Facebook parent company must do a lot with less.

The words arrived behind Meta, which operates advertising-dependent social networks Facebook and Instagram, disclosed second-quarter earnings and revenue below judges’ estimates. Social media rivals Snap and Twitter reported lowering quarterly results last week.

“Engagement trends on Facebook have generally stood stronger than we anticipated, and strong Reels growth is continuing to drive engagement across Facebook and Instagram,” Zuckerberg said on a conference call with analysts. “That said, we seem to have entered an economic downturn that will broadly impact the digital advertising business. It’s always hard predicting how deep or how long these cycles will be, but I want to say that the situation seems worse than it did a quarter ago.”

On Wednesday, the U.S. Federal Reserve raised its benchmark rate by 75 foundation points, and Fed Chair Jerome Powell said that consumer spending growth had stalled meaningfully. But he said he did not think the U.S. is in a slump now, and the National Bureau of Economic Research has not ruled on the timing of a possible recession.

That hasn’t stopped Meta, Google parent Alphabet, and different technology companies from lowering which hires plans.

“This is a period that demands more passion, and I expect us to get more done with fewer resources,” Zuckerberg stated.

In May, the company told media outlets that it was cutting back on slowing headcount growth. On Wednesday’s conference call, Zuckerberg

magnified.

“We plan to reduce headcount growth over the next year steadily,” he said. Many teams will shrink so we can shift energy to other areas inside the company. I want to give our leaders the ability to decide where to double down within their teams, where to backfill attrition, and where to restructure teams.”

“Despite the current challenges, I’m very confident for the long term,” Sandberg said. “We’re facing a cyclical downturn, but the digital ad market will continue to increase over the long run. Advertisers will go where they get the highest return on investment and the ability to drive their business. We believe we will continue to offer up very favorably compared to different advertising options.”

The challenging economic environment is factored into Meta’s third-quarter guidance, said David Wehner, the group’s outgoing finance chief.