Analysts are predicting Meta (META) may face a “tornado-like quarter.”

The news over the past month has sounded ominous, first with plans to scale back hiring, leave some positions unfilled, and even enact harsher measures of performance to drive less motivated employees out of the company. That all despite stating they are going to launch an expansion of their Reels video streaming platform at the same time, which will require an enormous tech build-out to support all of the video streaming. Despite that, CEO Mark Zuckerberg has said the company will scale back planned hiring by at least 30% this year.

Of present economic conditions, he said during a weekly Q&A session with employees, “If I had to bet, I’d say that this might be one of the worst downturns that we’ve seen in recent history.” 

Then earlier this year, word came that Facebook suffered a decline in daily active users. For a networking service, users draw in more users, creating more network connections at an exponential rate, driving out competition. Losses of users take away connections, and remove reasons for others users to stay, and that can snowball exponentially as well, as especially younger users begin giving their time and attention to competitors like TicTok.

Then there was word that Meta’s revenue growth slowed when Apple implemented its new privacy policy, which makes it harder to track users, and thereby target advertising. Estimates are that will cost Facebook $10 billion in lost revenue this year. That is 8.5% of total 2021 revenue and a quarter of 2022’s estimated profit.

Wedbush Managing Director Dan Ives says, “Because of the Apple IOS privacy issue — that’s been the been the gut punch, that continues to be a cut every quarter. There’s some pain ahead there.”

He notes the company is trying to pivot to the new technology of the Metaverse, but adds that it will not help the company weather the coming storms in the short term, adding, “You can rename the company Meta —[but] metaverse is still not until 3-5 years out in terms of revenue perspective. I think this is really bracing for a tornado-like quarter.”

Meta stock has lost more than 50% of its value, year-to-date.

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