Yesterday we echoed a report by Bloomberg on the complex situation being experienced at home in Meta. The bills don’t come out to the company, so Mark Zuckerberg is promoting a series of drastic changes to make it “more efficient”. Among them we find the classification of employees as “low performance” and the shadow of new mass layoffs that reappear on the scene.
At the time, some details about the direction the company was taking eluded us. And although it has remained silent, some information has leaked out, so now we can get a clearer idea of what is going on. Specifically, the number of people who may soon be laid off and the loss of certain privileges for middle managers.
Second wave of sight cuts
The cuts at Meta started at the end of last year, with the mass dismissal of 11,000 employees, the largest in the company’s history. Now, according to Business Insider, the conglomerate behind social networks like Instagram and Facebook will dispense with between 3,000 and 6,000 people, which translates into a reduction in staff between 5 and 10%. This move, they say, has sown an atmosphere of uncertainty.
The fear of being affected by the second wave of layoffs at Meta negatively influenced the dynamics of the company. According to the aforementioned vehicle, the internal culture has become more “toxic” and employees are “distracted”. In addition, a strong distrust of the governing body began to emerge. These, however, are not the only changes to come.
Big Tech employee structures are usually organized by tiers. Zuckerberg now wants to lower the minimum level of some open positions. When an employee took on a managerial engineering role, they did so at the E6 level. That is, a team leader who does not work at the same level as the employees he supervises, but has a more administrative role.
Less privileges for bosses
With this change, the entry level will be the M1, who, while understanding the tasks and responsibilities of being a team leader, must work alongside their subordinates. He does not have the privilege of evaluating the project from an administrative role and must immerse himself in it like any other member, in addition to overseeing it, of course. All of this responds to the company’s strategy of achieving “internal flatness”.
And to which must also be added the cuts in employee health and pension benefits and a new model of shared tables. The latter is also driven by Sundar Pichai, from Google, an executive also focused on reducing his company’s expenses.
Returning to the case of Meta, we do not know for sure what is going on in Mark Zuckerberg’s head, but some public data can help us to have an idea of the reality that the company lives. Meta is still huge and has some of the most used apps and social networks in the world. Facebook, Instagram and WhatsApp.
But over time, its family of apps seems to age compared to younger, fresher propositions like TikTok. Zuckerberg’s gamble to maintain his leadership position has been the metaverse. This concept, together with a decline in the advertising markethave become a major problem for the company’s present and immediate future.
In 2022, Meta had revenues of more than US$116,000 million, a slight decrease compared to the previous year, which stood at US$113,600 million. So far we could say that things weren’t so bad, but if we put into the equation that the company’s profit fell 69%, reaching 23.2 billion dollars, we see that the prospects are not very encouraging.
The company is using a lot of the money it makes (which is still a lot of money) on feed the metaverse concept. In 2022, Reality Labs, the division of Meta focused on Zuckerberg’s big bet, lost $13.27 billion, and this negative trend is expected to continue for a few more years. Investors certainly don’t seem too happy about this very long-term bet.