The parent company of Facebook and Instagram, Meta, announced a 1% loss in sales for the second quarter, marking the corporation’s first annual revenue decline ever.
According to reports, the business also had a 36% decline in net income for the second quarter, coming in at USD 6.7 billion, while overall expenditures and expenses increased by 22% to reach USD 20.5 billion.
In Meta’s results statement, executives cited a “poor advertising demand environment” that is predicted to persist into Q3.
For quarter, the business expects sales of USD 26-28.5 billion.
During company’s earnings call, Meta CEO Mark Zuckerberg stated, “We seem to have entered an economic slump that will have a broad impact on the digital advertising market.”
Further he added, “We’re decreasing speed of (our) investments and deferring certain costs that would have occurred in next year or two to a somewhat longer timeline because of more current revenue trend that we’re witnessing.”
“The corporation will be slowing down its headcount increase over the coming year,” added top executive.
“I want to give our leaders the power to decide within their teams where to double down, where to double down, where to backfill attrition, and where to restructure teams while minimising (the impact) to the long-term initiatives”, said Zuckerberg.
“Many teams are going to shrink so that we can shift energy to other areas inside the company,” he added.
Following the report, company’s shares experienced a modest decline in after-hours trading. Additionally, a larger decrease in digital advertising industry, which is hurting competitors like Alphabet and Snap, was closely followed by the findings.
In the meanwhile, ‘The Verge’ claimed that Meta is redesigning Facebook and Instagram to put more of a focus on short videos and posts that its system suggests to users in an effort to compete with TikTok.