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Speaker 1: It was a sharply lower session on Wall Street where

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Speaker 1: we had a lot of aggressing, aggressive selling that was

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Speaker 1: mostly tied to macro conditions, very aggressive commentary from the FED,

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Speaker 1: but also a lot of interesting individual stories. One we're

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Speaker 1: about to talk about at Facebook Corp. Metta and also

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Speaker 1: at Apple with that stock down nearly five percent, and

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Speaker 1: often we can say that as Apple goes, so goes

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Speaker 1: the NASDAC and the broader indexes. Well, let's take a

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Speaker 1: look at this meta story though. The CEO Mark Zuckerberg

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Speaker 1: outlining plans to reorganize the company, reorganized teams and reduce

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Speaker 1: the headcount for the first time ever, and joining us

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Speaker 1: to discuss this is Sarah Fryer, Bloomberg News, Big Tech

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Speaker 1: team leader. So this is a big story, first time

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Speaker 1: since two thousand and four, I guess to see this

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Speaker 1: sort of restructuring. It also has some big implications about

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Speaker 1: advertising revenue growth. Maybe save that for a moment and

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Speaker 1: just walk us through if you could share how they're

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Speaker 1: going to do this is just through um sort of

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Speaker 1: you know, just people leaving and not being replaced, or

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Speaker 1: will they actually lay off people. Well, I think it's

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Speaker 1: a little bit the same thing Basically, what they're saying

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Speaker 1: is that teams across the board at Meta are going

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Speaker 1: to have their budgets reduced, and how the teams manage

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Speaker 1: that is going to be up to them. UM, but

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Speaker 1: they are going to rely, as you said, eleettrition, if

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Speaker 1: people believe their jobs, they may not fill those roles.

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Speaker 1: In Overall, they do ext to be a smaller company

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Speaker 1: by the end of This is significant because, as you noted,

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Speaker 1: Meta for its entire history has been growing and growing

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Speaker 1: and growing UM using it's it's advertising business, which essentially

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Speaker 1: prince cash to fund these grand visions like like growing

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Speaker 1: into the metaverse, which is Mark Zuckerberg's idea of how

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Speaker 1: we'll all be hanging out in virtual reality in the future.

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Speaker 1: Now that, it's a lot harder when a few factors

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Speaker 1: come to account, namely UM, the economy is slowing, so

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Speaker 1: advertisers spending less UM, there have been some privacy restrictions

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Speaker 1: by Apple Inc. On iPhones that make it harder for

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Speaker 1: Meta to target advertising effectively. And UM people are being

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Speaker 1: drawn away from from Facebook and Instagram to new products

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Speaker 1: like TikTok. So you have this this UM, this the

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Speaker 1: set of factors that make it difficult for this company

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Speaker 1: to grow revenue in the way that they used to grow. Plus,

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Speaker 1: they're spending billions on this metaverse vision that is unlikely

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Speaker 1: to contribute to the bottom line for years now. During

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Speaker 1: let's during the first quarter, earning school better so that

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Speaker 1: the annual expenses would be roughly three billion dollars low

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Speaker 1: than initially projected. And what was the reading from that, Well,

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Speaker 1: the reading from that was that you know, they were

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Speaker 1: they were being responsible. Investors were UM, you know, pleased

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Speaker 1: to hear at UM. Now it's a little different. I mean,

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Speaker 1: I think this with this announcement, we're seeing an era

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Speaker 1: of UM a lot of limited opportunities for Meta. They

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Speaker 1: don't really have a backup plan for the way their

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Speaker 1: business is working right now. UM they need to grow

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Speaker 1: advertising revenue, but their their legacy services are not adding

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Speaker 1: users the way they used to. UM they need to

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Speaker 1: come up with their next big business model after advertising,

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Speaker 1: but things like e commerce haven't worked and they haven't

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Speaker 1: come up with a new blockbuster idea. UM. They've basically

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Speaker 1: acquired UM they're big growth areas like like Instagram and WhatsApp,

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Speaker 1: and they can't make a major acquisition like that again

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Speaker 1: because of antitrust pressure. So so they're really in a

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Speaker 1: tough spot here. Uh and they've lost more than half

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Speaker 1: of their value this year, um and and it is

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Speaker 1: it is a sort of an existential moment for this company.

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Speaker 1: And you know, it's not surprising that they're going to

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Speaker 1: have to cut cost, but how they recover from it

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Speaker 1: is going to be what's worth watching. Well, it's a

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Speaker 1: tough period of time for sure. I mean other companies

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Speaker 1: also reducing headcount and struggling with how to get leaner

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Speaker 1: going into the next year. Out of time now, Sarah,

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Speaker 1: but thanks very much for joining us. Sarah Fryar, Bloomberg

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Speaker 1: News Big Tech team Leader,