Meta, Facebook and Instagram’s parent company’s net income declined by 36 per cent to $6.7 billion for the second quarter, while total expenses increased by 22 per cent. It reported second-quarter sales of $28.8 billion, which was in line with expectations of $28 to $30 billion but represented a 1 per cent decline in revenue year on year. The company’s Daily active users on Meta’s family apps were low, while Meta’s primary social media platform, Facebook, saw a modest 3 per cent growth in the second quarter, despite the fact that the social media giant is facing fierce competition from rivals like Tik Tok.

As per Meta’s latest earnings release, a weak advertising demand environment is expected for the third quarter. The CEO, Mark Zuckerberg, stated, “We seem to have entered an economic downturn that will have a broad impact on the digital advertising business.” He continued, “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.”

Zuckerberg said, “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 minimising [the impact] on the long-term initiatives,” the Hollywood reporter reported.

The release of Meta’s financial report coincides with a drop in ad revenue experienced by other large internet firms, such as Snap, which has caused stock values to plummet. Another instance includes Alphabet CFO Ruth Porat. The firm disclosed an earning loss on Tuesday with YouTube ad revenue reaching $7.3 billion despite a persistent pullback in adviser spending.

Zuckerberg reportedly instructed staff internally earlier this month to be ready to face the biggest turndown they’ve seen in history. However, during the Meta’s earning call, the reels received a mention from Zuckerberg, who noted that users’ engagement with reels on Facebook and Instagram had increased by 30 per cent, Reuters reported.