The results illustrate the intensifying financial challenges facing the social media giant as it grapples with both macro-economic challenges and specific threats to its business model. Facebook warned in a statement that it expects marketers to spend less money on advertising due to broader concerns about the economy.
“This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is being driven by broader macroeconomic uncertainty,” the company said in a statement.
The company’s stock price has been slashed in half this year following a decision by Apple to impose new privacy rules designed to limit app makers’ ability to collect data on their users to power their targeted advertising business. The company is also facing unprecedented competition for young users, creators and advertiser dollars from newer social media platforms, such as TikTok and Snapchat.
Facebook also said Wednesday that it planned to reduce its expenses for the year to $85-88 billion, down from its previous outlook of $87-92 billion.
In recent weeks, Facebook executives have issued a dizzying number of directives, outlining a new era of higher performance expectations and slowed hiring as the company emerges from the pandemic with a growing list of economic challenges.
“We have reduced our hiring and overall expense growth plans this year to account for the more challenging operating environment while continuing to direct resources toward our company priorities,” the company said in statement.
In a bright spot for the company, Facebook reported daily active users on its core social network rose 3% to 1.97 billion in the second quarter. Monthly users also rose about 1% to 2.93 billion, the company said.
Facebook continues to stake its future on building out the so called metaverse, a term used to describe immersive digital worlds accessed by virtual reality-powered devices. The company envisions that people will want to work, play and shop in these new digital realms.
“We’re putting increased energy and focus around our key company priorities that unlock both near and long term opportunities for Meta and the people and businesses that use our services,” Mark Chief Executive Officer Mark Zuckerberg said in a statement.
Facebook also announced on Wednesday a shake up among its highest leaders. Facebook Chief Financial Officer David Wehner will assume a newly-created role as chief strategy officer. Susan Li, the company’s current vice president of finance, will become the new chief financial officer. Facebook chief operating officer Sheryl Sandberg announcement last month that she would be stepping down after 14 years.
This is a breaking story and will be updated
