Meta said it expects to make less money than expected in the third quarter because of weak advertising demand and a broader economic slowdown.
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Facebook-owner Meta piled onto fears of plunging demand in the advertising market, warning it expects to generate less revenue than expected next quarter.
The company announced Wednesday that weaker-than-expected advertising demand is being driven by broader uncertainty in the economy, as experts say the chances of a coming recession grow.
The social media giant is tightening its belt to cope with this more "challenging" environment, saying it expects to reduce hiring and overall expenses this year.
Meta said its latest Q2 revenue fell year-over-year to $28.8 billion — its first such decline since the company went public a decade ago.
Even worse, Meta set expectations for Q3 revenue at $26 billion to $28.5 billion, well below Wall Street's current estimate of $30.4 billion.
Meta's stock fell 2.7% in recent after-hours trading on Wednesday.
The future stepback in spending comes after a big year for Meta. Over the last few months, the company officially changed its name from Facebook to Meta, reflecting its shift in focus to investing in the metaverse. One current employee recently told Insider that Meta's change in strategy is "fomenting disorganization and anxiety" inside the company.
Meta said it grew its number of employees to more than 83,000 - a 32% increase from June 2021. Meta told employees in May that it was enacting a hiring pause. One employee anonymously told Insider they worry that Meta may lay off as much as 10% of its employees this year.
