CFO says Apple carries some blame for issues at Meta
You might recall that when Apple announced its App Tracking Transparency (ATT) feature which allows iPhone users to opt out of being tracked by third parties intent on sending them personalized ads, Meta co-founder and Chairman Mark Zuckerberg was not happy with Apple. He paid for full-page ads that were printed in newspapers such as The New York Times, The Wall Street Journal, and The Washington Post.
Meta blames Apple's App Tracking Transparency feature for its hiring freeze and drop in stock price
The ads complained that Apple was hurting small businesses by limiting their abilities to send customers personalized ads allowing them to teach their customers. The ads also pointed out that "10 million businesses use our advertising tools each month to find new customers, hire employees, and engage with their communities." And there you have it. Facebook was concerned with Apple's App Tracking Transparency because it could impact Facebook's own earnings (more on that below).
Facebook (now Meta) paid for open ads in major newspapers seeking to criticize Apple for its App Tracking Transparency feature
Last year, Meta said that ATT could result in the loss of $10 billion in revenue for the company while data management company Lotame released an even higher estimate that forecasted a $12.8 billion shortfall in revenue for Meta thanks to Apple and its ATT.
Meta has now announced a major hiring freeze that affects all of the company's units. The social media firm, the parent company of Facebook, WhatsApp, Instagram, and Facebook Messenger, blames four different factors with Apple's App Tracking Transparency feature at the top of that list. Business Insider was able to obtain a memo written by Meta chief financial officer David Wehner which was sent to all employees.
In that memo, Wehner says that the four factors that are damping Meta's revenues include:
- Loss of signal from iOS changes (ATT).
- The war in Ukraine.
- The "general macroeconomic environment."
- Easing of lockdowns resulting in people spending less time online.
Wehner's memo makes it clear that Meta's issue with Apple's App Tracking Transparency has less to do with it hurting small businesses than with it hurting Meta. In the memo, the CFO writes, "We’re facing headwinds including slower revenue growth than anticipated at the start of the year."
Global recruit chief Miranda Kalinowski sent a memo of her own stating that Meta will immediately put a freeze on the hiring of engineers. She wrote, "We’re still working out what this means for each org, but this will affect hiring goals for almost every team across the company. Based on this refreshed guidance, we know we need to adjust our hiring targets across the board starting with Eng[ineering]."
It would appear from her memo that engineering jobs related to Machine Learning will still be filled. Jumping back to CFO Wehner's memo, the executive mentions Meta's plan to replace the data lost due to Apple's ATT using AI. In addition, the memo tries to put a happy face on Meta's business prospects at the moment.
Apple says that App Tracking Transparency does not force Meta to make changes to its businesses
"We’re in a strong position with a healthy business, and we feel optimistic about the opportunities to re-accelerate growth, particularly through unlocking new revenue streams through Reels monetization, incorporating AI into our ads system to overcome signal loss from iOS changes, growing business messaging and bringing the metaverse to life," the CFO wrote.
He adds, "But we also have to be responsible by responding to the unpredictable market forces that have put pressure on our business over the past few months. In practice, this is a valuable forcing function to make sure we’re prioritizing more effectively and are all working on the most important things."
Apple points out, as it always has when pressed on the subject, that App Tracking Transparency does not require Facebook to make any changes to its businesses. "We believe that this is a simple matter of standing up for our users. Users should know when their data is being collected and shared across other apps and websites — and they should have the choice to allow that or not."
The Cupertino-based tech giant's response states that "App Tracking Transparency in iOS 14 does not require Facebook to change its approach to tracking users and creating targeted advertising, it simply requires they give users a choice."
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