Meta, the parent company of Facebook and Instagram, posted its first revenue decrease on Thursday due to a decline in ad spending amid a weakening economy and intensifying competition from rival TikTok.

The numbers were mainly the result of a broader decrease in the digital advertising business, which has impacted competitors such as Google, and Twitter — which also reported a decline in income — and Snap. On Tuesday, Alphabet posted its worst quarterly growth in the past two years.

Mark Zuckerberg, Meta's chief executive officer, stated that the company intends to "gradually reduce" personnel growth after a hiring spree earlier this year.

In a conference call with analysts, he stated, "This is a time that requires greater vigor." Expect us to accomplish more with fewer assets.

Beyond the economic crisis, Meta confronts particular problems, including the impending departure of Sheryl Sandberg, the company's chief operating officer and creator of its large advertising division.

In addition to TikTok, the decline in ad spending during the recession and Apple's privacy changes, "questions about Meta's leadership" — including Sandberg's departure and negative sentiment about the company as a whole — contributed to the decline, according to Raj Shah, managing partner of digital consultancy Publicis Sapient.

In April-June, Meta earned $6.69 billion in profits or $2.46 per share. That is 36% less than the $10.39 billion, or $3.61 per share, made during the same period last year.

The revenue was $28.82 billion, down 1% from $29.08 billion the previous year.

According to a poll by FactSet, analysts anticipated $2.54 per share earnings on revenue of $28.91 billion.

Debra Aho Williamson, an analyst at Insider Intelligence, wrote in an email, "The quarterly revenue decline year-over-year demonstrates how rapidly Meta's business has deteriorated." "Prior to these findings, we had predicted that Meta's global ad revenue would climb by 12.4% to approximately $130 billion this year. Now, it's unlikely that number will be reached."

She said that if this could be considered good news, Meta's competitors also face slowdowns.

According to the company, meta is undergoing a corporate change that will take years to complete. It seeks to transition from a provider of social networks to a dominant force in a developing virtual reality construct it calls the "metaverse" — similar to a 3D version of the internet. Mark Zuckerberg, Facebook's chief executive officer, has defined it as an immersive virtual environment where individuals can virtually "enter" instead of simply staring at a screen. The corporation is investing billions in its metaverse plans, which will likely take years to bear fruit, and as part of its strategy, it changed its name to Meta in the fall of 2016.

"Expect Meta's decline to continue until Meta can monetise the metaverse and commence another Meta-reversal," said Shah.

Meta anticipates revenue between $26 billion and $28.5 billion for the upcoming quarter, which is below Wall Street's projections.

David Wehner, chief financial officer, said, "This outlook reflects a continuation of the weak advertising demand environment we experienced throughout the second quarter, which we believe is driven by broader macroeconomic uncertainty." As chief strategy officer, Wehner will supervise the company's strategy and corporate development, according to Meta. Susan Li, the current vice president of finance, will succeed him.

In after-hours trading, Meta Platforms Inc. shares slid $6.88, or 4.1 percent, to $162.70. Wednesday's regular trading session concluded with the stock price at $169.58, up $10.43, or 6.6 percent. Meta's stock has lost more than fifty percent of its value since the beginning of the year.