Meta Platforms and the firm’s CEO Mark Zuckerberg have revealed the company’s first-ever sales decline in its latest Q2 results.
Not only did Meta record a 36% drop in net revenue from 2021’s Q2 results but Zuckerberg admitted that the economic downturn has accelerated from its Q1 findings, also recording a 21% drop in net income.
The Meta CEO spoke on a Q2 earnings call, stating: “We seem to have entered an economic downturn that will have a broad impact on the digital advertising business.
“It’s always hard to predict how deep or how long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago.”
As the US prepares itself for an impending recession, Meta reported a 1% drop in revenues which underlines a tough time for the tech giant which has seen the closure of its crypto digital wallet platform Novi and prepares itself to cut up to 10% of its workforce.
Zuckerberg has also revealed that for the rest of 2022 may see more struggles, hinting towards less spending, slower hiring, and reduction on investments.
This downturn year for Meta has halted progress on a litany of proposed projects it intended to work on, one being the implementation of NFT trading on its social media platform Instagram.
“Based on the revenue growth we were seeing in 2021 we kicked off a number of multi-year projects to accelerate our business,” stated Zuckerberg.
“But given the more recent revenue trajectory that we’re seeing, we’re slowing these investments down.”
Layoffs within the tech and financial sectors have soared over the past several months, an indictment of the economic pressures that many countries are facing. According to TrueUp research, just under 29,000 total layoffs within these sectors have occurred in July alone.
Meta is also experiencing problems with its highly paid workforce at Facebook, which grew 30% last year. This is also compounded by Meta’s 14% decline in price per ad revenue across its Facebook and Instagram platforms.
Despite the global economic decline and Meta suffering unprecedented losses, Zuckerberg maintains its ambitions to grow and explore the metaverse. The 38-year-old believes, “The first wave driving our business today is AI, and then the second longer term wave is the emergence of the metaverse.”