Meta, Facebook’s parent, is cutting expenses and freezing headcount after reporting a 4% drop in revenue to $US27.714 billion for the September quarter.
The result adds to the gathering clouds over the digital media sector in the face of deteriorating economic conditions.
Google this week reported a drop in advertising revenue and Snap reported slow growth as brands pull back their budgets.
In Australia, digital ad spend is running strong, according to Standard Media Index (SMI) numbers. In August, SMI data put digital higher compared to last year. September numbers haven't been finalised but are expected to be up again.
Meta expects fourth quarter 2022 total revenue to be in the range of $30 billion-$32.5 billion.
The social media platform says some teams will be held flat in terms of headcount. Others will shrink. Only those with the highest priority will grow.
Headcount at the end of 2023 is expected to be in-line with third quarter levels.
On costs, Meta said: “We have increased scrutiny on all areas of operating expenses. However, these moves follow a substantial investment cycle so they will take time to play out in terms of our overall expense trajectory. “
Mark Zuckerberg, Meta founder and CEO: "Our community continues to grow and I'm pleased with the strong engagement we're seeing driven by progress on our discovery engine and products like Reels.
"While we face near-term challenges on revenue, the fundamentals are there for a return to stronger revenue growth.
“We're approaching 2023 with a focus on prioritisation and efficiency that will help us navigate the current environment and emerge an even stronger company."
Insider Intelligence principal analyst Debra Aho Williamson: "Meta is on shaky legs when it comes to the current state of its business.
"Mark Zuckerberg’s decision to focus his company on the future promise of the metaverse took his attention away from the unfortunate realities of today: Meta is under incredible pressure from weakening worldwide economic conditions, challenges with Apple’s AppTrackingTransparency policy, and competition from other companies, including TikTok, for users and revenue."
"To return to stronger growth, Meta needs to turn its business around. As Facebook Inc., it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it’s no longer that innovative groundbreaker.
"While Alphabet’s poor Q3 results show that that no digital publisher is immune to the worsening economy, Meta would benefit from less priority on the metaverse and more on fixing its core business."
Meta's numbers:
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.