Teenage users on Facebook in the US are projected to drop 45 per cent over the next two years, driving an overall decline in daily users in the company's most lucrative ad market, reports The Verge.
"Young adults between the ages of 20 and 30 were expected to decline by 4 per cent during the same timeframe," the report noted, quoting internal Facebook documents.
Instagram was doing better with young people, with full saturation in the US, France, the UK, Japan, and Australia.
"But there was still cause for concern. Posting by teens had dropped 13 percent from 2020 and "remains the most concerning trend", according to Facebook researchers.
The "ageing up issue is real. Increasingly, fewer teens are choosing Facebook as they grow older," the researcher wrote in an internal memo, part of disclosures made to the US Securities and Exchange Commission (SEC) and provided to Congress by legal counsel for whistleblower Frances Haugen.
Haugen has claimed that Facebook's business of selling ads based on engagement leads it to keep users on the service at all costs, even when it knows that the content they are engaging with is harmful. She also testified before the US Congress that Instagram can have a negative effect on the mental health of teenagers.
"While it famously started as a networking site for college students, employees have predicted that the aging up of the app's audience - now nearly 2 billion daily users - has the potential to further alienate young people, cutting off future generations and putting a ceiling on future growth," the report emphasised.
Joe Osborne, a Facebook spokesperson, said in a statement: "Our products are still widely used by teens, but we face tough competition from the likes of Snapchat and TikTok. All social media companies want teens to use their services. We are no different."
To address the growing crisis, employees at Facebook and Instagram have been planning products tailored for teens and young adults, according to the internal documents.
However, they recognise that it is going to be an uphill battle on both platforms.
Facebook has been working on Groups+, meant to let young people join groups for specific personalities and "close-knit communities" as a way to "increase cultural relevance."
The social media giant is also planning to rebrand the company with a new name that focuses on the metaverse.
Facebook CEO Mark Zuckerberg is expected to announce the new branding at the company's Connect conference on October 28.
Facebook in September announced that it will invest $50 million to partner with the organisation to responsibly build the Metaverse - a new phase of interconnected virtual experiences using technologies like virtual and augmented reality (VR/AR).
The Metaverse is a set of virtual spaces where one can create and explore with other people who aren't in the same physical space.