Meta Platforms misses on EPS, signals bearish hiring in 2023

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Meta Platforms, Facebook's parent company, reported its third-quarter financial results Wednesday, indicating it will take a bearish approach to hiring in 2023.

The company generated $27.71 billion in third-quarter revenue, a 4% drop from the same period last year, but above the $27.38 billion estimated by analysts.

Meta Platforms is considering a reduction in the money it gives news organizations as it reevaluates the partnerships it struck over the past few years. (AP Photo/Tony Avelar, File / AP Newsroom)

Its net income came in at about $4.4 billion, dropping 52% year-over-year. Earnings per share for the quarter was $1.64, below analyst estimates of $1.89.

The monthly (MAUs) and daily active users (DAUs) for Facebook were on target with estimates. The platform had an average of 2.96 billion MAUs and 1.98 billion DAUs. 

Ticker Security Last Change Change %
META META PLATFORMS INC. 129.82 -7.69 -5.59%

META INVESTOR URGES COMPANY TO SLASH HEADCOUNT, SLOW METAVERSE SPENDING

CEO and co-founder Mark Zuckerberg noted on the earnings call Wednesday evening that it was "not clear the economy has stabilized yet, so we’re planning our budget somewhat more conservatively." 

Mark Zuckerberg, via video, speaks at the 2022 SXSW Conference and Festivals at Austin Convention Center March 15, 2022, in Austin, Texas. (Samantha Burkardt/Getty Images for SXSW / Getty Images)

"In 2023, we’re going to focus our investments on a small number of high-priority growth areas," he said. "So that means some teams will grow meaningfully, but most other teams will stay flat or shrink over the next year."

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Meta expects to "end 2023 as either roughly the same size or even a slightly smaller organization that we are today" in aggregate, according to Zuckerberg. 

The company employed 87,300 at the end of September, which it said was a year-over-year jump of 28%.

A smartphone with Facebook’s logo is seen with the new Meta logo in this illustration from Oct. 28, 2021.  (Reuters/Dado Ruvic/Illustration / Reuters Photos)

David Wehner, CFO of Meta Platforms, echoed Zuckerberg’s bearish hiring sentiments on the call, noting the tech giant is "making significant changes across the board to operate more efficiently."

"We expect headcount at the end of 2023 will be approximately in line with third-quarter 2022 levels," he said, at one point saying hiring was going to "slow dramatically going forward."

He also said the company’s hiring pace slowed this quarter "consistent with our previously stated plans." During the third quarter, the company brought on 3,700 "net new hires," a drop compared to its 5,700 net new additions in the prior quarter, according to the CFO. 

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Zuckerberg previously said during the second-quarter earnings call that the company’s plan was to "steadily reduce headcount growth over the next year."

On Wednesday, Meta's outlook for the fourth quarter projected between $30 and $32.5 billion in total revenue.

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