Amidst the fear of global meltdown, many companies have started executing the cost optimisation process to stay competitive and afloat. Getting rid of the employees on a bench or non-performing assets is the first step that most companies take. This year, there is a sharp rise in employee layoffs. Some of the world’s largest corporations have eliminated their underperforming employees. Meta, the parent company of Facebook, is no longer an exception.
Reportedly, Meta is undergoing ‘quiet layoffs’ at Facebook which will result in thousands of job losses in the next few weeks. According to several employees spoke with Insider, the number of layoffs at Facebook could be as much as 12,000 or about 15% of its total workforce.
“It might look like they are moving on, but the reality is they are being forced out,” the employee told Insider.
During Facebook’s employee-review process, executives informed directors across the company that they should select at least 15% of their teams to be labelled as “needs support”. Most workers perceive this restructuring as a “performance-improvement plan,” or PIP, signalling their job would be gone soon.
The social networking giant would lose approximately 12,000 headcounts if 15% of its workforce were laid off. Some of them will be given 30 days to find a new position at the company. Failing to do so, they would be left with no other option but to leave. As Meta is conducting “quiet layoffs”, all the workers are requested to stay tight-lipped to avoid any negative PR that the company may face because of the mass layoff.
Facebook Hiring Freeze
There has been a fear of layoffs among employees ever since the social networking giant seized the hiring process in the first half of the year. In May 2022, Meta stopped hiring engineers and low-level data scientists. Some reports claim that the company’s product teams, including Facebook Dating and Gaming, Messenger Kids, the Commerce team, and the Remote Presence team formed during the pandemic, have already been impacted by the engineering hiring freeze.
In July this year, Meta’s head of engineering, Maher Saba, asked managers to identify underachievers on their teams who fell into the “needs-support” category, however, he did not state the percentage of employees who should be labelled that way.
“Our plan is to steadily reduce headcount growth over the next year. Many teams are going to shrink so we can shift energy to other areas,” Zuckerberg during the last Meta earnings call.
Now last week, CEO Mark Zuckerberg disclosed the company’s intentions to halt hiring and restructure some groups in an effort to reduce costs and shift priorities, during an internal all-hands call.
Facebook Stock, Valuation Tanked
Since the beginning of the year, Meta has been going through rough weather. The valuation of the company has tanked 59% due to the constantly declining stock price. Despite making many efforts the Zuckerberg-led management has, so far, failed to seize the fall. Currently, Meta’s stock price is trading at $139 apiece, the lowest in the last four years.
As a result, Mark Zuckerberg’s net worth has nosedived to $52.5 billion, falling from $123 billion a year ago. This is the first time in the last few years that he is slipped out of the world’s top 20 billionaires list as well.
Now, all eyes are set on the success of Metaverse to turn the table in favour of Meta (Facebook). While the initial market response toward it looks exciting, there are many speculations and resistance from bigwigs of the industry as well.