Facebook and Instagram's parent company Meta reported its first-ever yearly decline in revenue for the second quarter, announcing a 1 per cent drop to USD 28.8 billion.
As per The Hollywood Reporter, the company also saw net income fall by 36 per cent, landing at USD 6.7 billion for the second quarter, while total costs and expenses rose by 22 per cent to hit USD 20.5 billion.
Executives pointed to a "weak advertising demand environment" that is expected to continue into Q3, according to Meta's earnings release.
The company is forecasting revenue between USD 26-28.5 billion for the quarter.
"We seem to have entered an economic downturn that will have a broad impact on the digital advertising business," Meta CEO Mark Zuckerberg said during the company's earnings call.
"Given the more recent revenue trajectory that we're seeing, we're slowing the pace of (our) investments and pushing some expenses that would have come in the next year or two off to a somewhat longer timeline," he added.
The top executive also said the company would be reducing its "headcount growth over the next year."
"Many teams are going to shrink so that we can shift energy to other areas inside the company, and I want to give our leaders the ability to decide within their teams where to double down, where to double down, where to backfill attrition, and where to restructure teams while minimizing (the impact) to the long-term initiatives," Zuckerberg said.
The company's stock dropped slightly in after-hours trading following the results. The results also largely followed a broader decline in the digital advertising market that is dinging rivals such as Alphabet and Snap.
Meanwhile, in its effort to compete with TikTok, Meta is rearchitecting Facebook and Instagram to place an emphasis on short videos and posts that its system recommends to people, The Verge reported.
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