The CEO of Meta Platforms said on the company's second-quarter earnings call that the economy seems to be in a downturn that will hurt digital advertising, so the Facebook parent company needs to do more with less.
The comments came after Meta, which runs advertising dependent social networks, disclosed second quarter earnings and revenue that came in below analysts' estimates. Last week, social media companies reported lower-than- expected results.
"Engagement trends on Facebook have generally been stronger than we anticipated and strong Reels growth is continuing to drive engagement across Facebook andInstagram." We seem to have entered an economic downturn that will affect the digital advertising business. I think the situation is worse now than it was a quarter ago.
The US Federal Reserve raised its benchmark rate by 75 basis points on Wednesday. He said that he didn't believe that the U.S. is in a recession at the moment.
Meta and other technology companies are still cutting hiring plans despite that.
The period demands more intensity and I expect us to get more done with less resources.
The company told media that it was slowing down growth. On Wednesday, he explained.
He said that the plan was to gradually reduce the growth of the workforce.
During Wednesday's call, Facebook's outgoing operating chief said inflation and uncertainty about a recession are adding to the complexity of the company.
I'm very confident for the long term, despite the current challenges. The digital ad market will continue to grow despite the downturn. Advertisers will go where they get the best return on their investment. We think we will show up very well compared to other options.
David Wehner, the company's outgoing finance chief, said that the difficult economic climate is factored in to Meta's third quarter guidance.
Meta shares went down after the call.
King Lip says that Meta is an attractive stock due to its growth potential.
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