Sales in the three months to June 2022 fell 1% to $28.8 billion, while profits fell 36% to $6.7 billion. The social media giant said revenues could fall further still, to as low as $26 billion in the next quarter. Monthly active users of Facebook increased just 1% on the previous year.
Meta founder Mark Zuckerberg told investors: “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 long these cycles will be, but I’d say that the situation seems worse than it did a quarter ago.”
Zuckerberg said the company planned to steadily reduce the growth in company headcount over the next year in a bid to cut costs. Last month, the tech executive told staff the firm would be hiring thousands fewer engineers than planned as it prepared for “one of the worst downturns we’ve seen in recent history,” warning “there are probably a bunch of people at the company who shouldn’t be.”
The Meta founder promised the company’s billions of dollars of investment into the metaverse would pay off in the long term.
The firm is the latest social media business to feel the effects of a slowdown in the advertising market, as thinner profit margins prompt firms to cut back spending on ads.
Last week, Twitter posted an unexpected drop in revenue, while operating losses hit $344 million, and costs and expenses went up 31% year-on-year to hit $1.5 billion. Snap shares plummeted 25% after it missed revenue expectations and warned it faces “incredibly challenging” conditions.
Tech stocks have lost a combined $3 trillion in value since the start of the year, as soaring inflation, war in Ukraine and fears of a looming recession erased gains made in 2021 and prompted firms to slash growth forecasts and cut back budgets. Meta shares have fallen almost 50% since the beginning of 2022.