In another update, Meta Platforms is
bracing for a leaner second half of the year, as it copes with macroeconomic
pressures and data privacy hits to its ads business, according to an internal
memo seen by Reuters on Thursday.
The company must "prioritise more
ruthlessly" and "operate leaner, meaner, better executing
teams," Chief Product Officer Chris Cox wrote in the memo, which appeared
on the company's internal discussion forum Workplace.
"I have to underscore that we are in
serious times here and the headwinds are fierce. We need to execute flawlessly
in an environment of slower growth, where teams should not expect vast influxes
of new engineers and budgets," Cox wrote.
Meta did not immediately respond to a
request for comment.
The memo is the latest rough forecast to
come from Meta executives, who already moved to trim costs and pause hiring
across much of the company this year in the face of slowing ad sales and user growth.
Tech companies across the board have scaled
back their ambitions in anticipation of a possible US recession, although the
slide in stock price at Meta has been more severe than at competitors Apple and
Google.
The world's biggest social media company
lost about half its market value this year, after Meta reported that daily
active users on its flagship Facebook app had experienced a quarterly decline
for the first time.
Its austerity drive comes at a tricky time,
coinciding with two major strategic pivots: one aimed at re-fashioning its
social media products around "discovery" to beat back competition
from short-video app TikTok, the other an expensive long-term bet on augmented
and virtual reality technology.
In his memo, Cox reportedly said Meta would
need to increase fivefold the number of graphic processing units (GPUs) in its
data centres by the end of the year to support the "discovery" push,
which requires extra computing power for artificial intelligence to surface
popular posts from across Facebook and Instagram in users' feeds.
Interest in Meta's TikTok-style short video
product Reels was growing quickly, said Cox, with users doubling the amount of
time they were spending on Reels year over year, both in the United States and
globally.
Some 80 percent of the growth since March
came from Facebook, he added.
That user engagement with Reels could
provide a key route to bolster the bottom line, making it important to boost
ads in Reels "as quickly as possible," he added.
Zuckerberg told investors in April that
executives viewed Reels as "a major part of the discovery engine
vision," but at the time described the short video shift as a
"short-term headwind" that would increase revenue gradually as
advertisers became more comfortable with the format.
Cox said Meta also saw possibilities for
revenue growth in business messaging and in-app shopping tools, the latter of
which, he added, could "mitigate signal loss" created by Apple-led
privacy changes.
He said the company's hardware division was
"laser-focused" on successfully launching its mixed-reality headset,
code-named "Cambria," in the second half of the year. Meta was also
focused on linking accounts across its virtual reality products and traditional
social media apps, he said. © Reuters
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