Meta, the parent of Facebook, sent an internal memo to employees warning them that the company faces hard times ahead in the second half of the year, as it faces tech challenges to its advertising business and the economy weakens in the face of rampant inflation and an increasingly aggressive Fed.
Chief product officer Chris Cox laid out where the company would be investing its resources to maximize profits through this period. The memo reiterated a lot of the things CEO and founder Mark Zuckerberg had told analysts during a first quarter earnings report about how the new Apple privacy update to the iPhone would impact their ability to target ads.
Cox emphasized to employees, that Meta was in, “serious times here and the headwinds are fierce.”
He went on, “We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets. We must prioritize more ruthlessly, be thoughtful about measuring and understanding what drives impact, invest in developer efficiency and velocity inside the company, and operate leaner, meaner, better exciting teams.”
In an attempt to mitigate the damage done by Apple’s new privacy update, which has limited the ability of Facebook to track users and target ads to them, Cox said the company will shift its focus to its new TikTok competitor, Instagram Reels, and develop an AI content recommendation system similar to the one used by TikTok.
He said Meta will also invest in systems to allow retailers to display ads to customers on its family of apps, and for businesses to facilitate communications with employees through messaging.
A Meta spokesperson said the memo was not as significant as the media is making it out to be, and that, “This was simply an internal strategy memo intended to build on what we’ve already said publicly in earnings about the challenges we face and the opportunities we have, where we’re putting more of our energy toward addressing.”
Meta was trading flat in after-hours trading Thursday, at $161.10.
