- Chief Product Officer Chris Cox warned employees at Facebook-parent Meta that lean times are ahead.
- To make up for the effects of last year's Apple privacy update, which decreased the company's ability to target ads, Meta will invest in Instagram Reels, its TikTok competitor, as well as shopping and messaging features.
Facebook-parent Meta has warned employees to expect a tough second half of the year as the company continues to weather challenges related to its core online advertising business amid a weakening economy.
Meta chief product officer Chris Cox detailed the company's financial dilemma in an internal memo that detailed key areas where the social media giant plans to invest, a spokesperson confirmed to CNBC. The memo was previously reported by Reuters.
Cox reiterated statements made by Meta CEO and co-founder Mark Zuckerberg during a call with analysts as part of the company's first quarter earnings report, which detailed the negative impact to the company's business caused by a privacy update Apple made to the iPhone last year.
The Meta executive added that the company is in "serious times here and the headwinds are fierce," underscoring that its challenges aren't likely to vanish anytime soon.
"We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets," Cox wrote. "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."
To offset the impact of Apple's update, which limited Facebook's ability to target ads to specific audiences, Cox said the company is pushing hard to make money from Instagram Reels, its TikTok competitor, and also investing in AI to drive content recommendations like TikTok does, as the company has previously said.
Meta also plans to invest in features that would make it easier for retailers to show ads to customers on its family of apps, and for employees communicate with businesses through messaging.
A Meta spokesperson downplayed the significance of the internal memo to CNBC, noting, "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 shares were relatively flat in after-hours trading on Thursday at $161.10.