The company will lay off 10,000 more employees.
After a couple of rough years for Meta, the company he founded, Mark Zuckerberg is hoping for a turnaround. I suppose you can’t blame him — things couldn’t get much worse. First, Apple’s rollout of App Tracking Transparency cost Meta as much as $10 billion. Then, the pivot to building the metaverse hasn’t really panned out. Finally, tech companies in general have felt the pressure of slower growth. As I said, it’s been rough.
It turns out, however, that there’s an important leadership lesson in this case, which is that leaders are accountable for the decisions they make. Or at least they should be.
For Zuckerberg, the answer to these problems was to proclaim at the company’s most recent earnings call that 2023 would be what he calls a “year of efficiency.” That came after Meta had already laid off 11,000 employees last fall in an effort to contain expenses. Now, the company is cutting even more employees.
“Overall, we expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” Zuckerberg wrote in an email to employees that was published on the company’s blog. “This will be tough and there’s no way around that. It will mean saying goodbye to talented and passionate colleagues who have been part of our success. They’ve dedicated themselves to our mission and I’m personally grateful for all their efforts. We will support people in the same ways we have before and treat everyone with the gratitude they deserve.”
Look, I get that layoffs are a thing that happens, and — to be fair — Meta seems to be trying to do the right thing to take care of employees who lose their jobs. But there’s really no good way to tell someone they’re no longer going to get a paycheck since nothing you can say will make it easier to pay their rent.
It’s not hard to see why Zuckerberg would want to make a change. The company’s stock is up 26 percent since he started talking about his “year of efficiency.” It was up almost 7 percent just on Tuesday, when the company announced the additional layoffs.
At a time when Meta is struggling to figure out what it wants to be when it grows up, shareholders are cheering the fact that the company is cutting expenses. Never mind that if Meta doesn’t know by now, it’s probably too late. As for shareholders, sure, cutting expenses means more short-term profit (all other things being equal).
There is no question Meta, like many of its tech peers, had gotten bloated. It’s easy to just keep hiring when your core business is printing money, which is what happened over most of the past decade, but especially the past few years. Now, as the economy settles back down to reality, that strategy doesn’t look so great. In response, a lot of companies have turned to laying off employees.
On the other hand, who thought unsustainable growth was a good idea in the first place? More importantly, why didn’t anyone stop to think that maybe the growth during the pandemic, when people were spending a lot more time online, might not continue when they’re able to, you know, go outside again?
Ultimately, the problem is that it never occurred to Meta’s management, including Zuckerberg, that they were over-investing in things they wouldn’t be able to afford if circumstances changed. So far, that has meant more than 20,000 people have lost their jobs at Meta alone. Somehow, Zuckerberg gets to keep his.
I mean, of course he does. You can’t fire Mark Zuckerberg. Even though Meta is a publicly traded company with shareholders and a board of directors, Zuckerberg owns a controlling stake through a very special class of shares that exist precisely so that he can’t be fired.
Not only that, but the majority of Zuckerberg’s net worth is in Meta’s stock. Every time Zuckerberg lays off employees and the stock goes up, it’s better for him personally. That’s the opposite of accountability. Leaders should be accountable for the decisions they make. And more importantly, when they make bad decisions, it shouldn’t just be their employees that get cut.
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