Meta's ‘Efficiency’ Layoffs Take a Toll on Employee Productivity
(Bloomberg) -- Meta Platforms Inc. employees received news Wednesday of the final round of previously announced job cuts, which affected thousands of workers in the company’s business departments. Now, remaining staff are hoping an uncomfortable limbo at the company can end.
Most Read from Bloomberg
Winklevoss Twins Attempt Pivot After Gemini Loses Money and Employees
Twitter Is Now Worth Just 33% of Elon Musk’s Purchase Price, Fidelity Says
JPMorgan Builds Unit for World’s Richest Families in Wealth Bet
McCarthy Confident on Debt Vote Despite Hard-Line Ouster Threat
The layoffs complete the bulk of the restructuring Chief Executive Officer Mark Zuckerberg announced in March to eliminate 10,000 positions. Initial reductions affected the company’s recruiting and human resources departments, and in late April jobs in Meta’s tech groups were slashed. Zuckerberg has said further cuts will come in only a “small number of cases” for the rest of the year, giving those people left a cold sense of relief.
The company, which owns Facebook, Instagram and WhatsApp, said the layoffs were necessary to improve efficiency, after over-hiring during the pandemic. Meta promised faster product development and decision-making that sent its shares up more than 100% so far this year. But employees said some important work and planning has been at a standstill. Notably, Meta is still deciding on its product roadmap for the rest of the year, while it sorts out resources following cuts in the tech group, a person familiar with the matter said.
During the limbo, employees have been unsure who to collaborate with, how to shift responsibilities on their teams or who would be cut next, according to current and recently let-go employees, who asked not to be named discussing internal issues. Zuckerberg announced which business units would be impacted weeks ago, leaving workers anxious and demotivated, making up tasks for themselves or avoiding work until there’s a clearer directive, others said.
Fired employees were notified individually by email at 5 a.m. in San Francisco, and Zuckerberg plans to address those now out of a job this morning, one of the people said. In some countries, a large portion of the local workforce has been affected. In Ireland, Meta said Wednesday it expected to eliminate about 490 roles, across several teams including finance, sales, marketing and engineering. The company also earlier cut its whole Instagram presence in London.
A spokesperson for Meta declined to comment.
The three rounds of cuts this year follow a slashing of 13% of Meta’s workforce in November — the first major layoffs it had ever done. The company is simultaneously in a hiring freeze for most roles, and going through a process of asking middle managers to become individual contributors, or risk losing their jobs in some cases.
Executives have blamed a rush of hiring during the pandemic, when people were stuck at home spending more time online on Meta’s social media platforms and advertising dollars surged. Then last year annual revenue growth declined for the first time as the economy looked less certain and changes by Apple Inc. made digital ads less effective, prompting marketers to pull back spending. In the face of falling sales, Meta was met with harsh scrutiny over the billions of dollars it’s spending on the virtual reality platform called the metaverse, a business line that may take a decade to make money, and investors drove the stock down 64% for the worst year on record.
In February, Zuckerberg announced that 2023 would be the “year of efficiency,” sending the stock soaring 23% in one day and validating the cost-cutting measures. Even as the company is firing employees, it continues plowing billions of dollars into improving infrastructure for artificial intelligence technology and Zuckerberg’s vision of the metaverse.
Most Read from Bloomberg Businessweek
Assault Allegations Plague a $1.4 Billion Home Eldercare Startup
Sergey Brin Has a Secret Plan to Put Airships Back in the Skies
Republicans Hail Big Spending Cuts That Economists Say Will Have Little Impact on the Economy
©2023 Bloomberg L.P.