This is what likely is happening. Zuck and co, just like the Google leaders, need to keep Wall Street happy to try to bolster the stock as much as possible. While I don't know all of the internals of the FB organization, if it is anything like Google, it could probably make the same profit with a fraction of its current headcount. So why was it on a hiring spree? Because it gives the perception of innovation to Wall Street which boosts the stock price.
Since they pay a large chunk of their comp in RSU's that is like printing money to further prop up the price of the stock. Does all of that extra headcount actually create real innovation? Some does, but a lot is just fluff to keep Wall Street happy with their perception of innovation while not really moving the needle with profits.
Now we are in a bear market and Wall Street is rewarding austerity and fundamentals over speculative spending. The leadership of the company is reacting accordingly.
The silver lining is that perhaps this will begin to erode away the nearly monopoly status that companies like Google and Facebook have had in their respective spaces.
Since they pay a large chunk of their comp in RSU's that is like printing money to further prop up the price of the stock. Does all of that extra headcount actually create real innovation? Some does, but a lot is just fluff to keep Wall Street happy with their perception of innovation while not really moving the needle with profits.
Now we are in a bear market and Wall Street is rewarding austerity and fundamentals over speculative spending. The leadership of the company is reacting accordingly.
The silver lining is that perhaps this will begin to erode away the nearly monopoly status that companies like Google and Facebook have had in their respective spaces.