Meta’s recent job cuts affect about 10,000 employees and about 5,000 open positions. Arnd Wiegmann/Reuters
Meta CEO Mark Zuckerberg announced another round of layoffs last week, affecting 10,000 employees.
The layoffs are part of an efficiency plan, increasing productivity and making Meta a talent magnet.
But the job cuts are likely to have the opposite effect, two management experts told Insider.
Meta CEO Mark Zuckerberg wants the company to get its beach body in time for summer by laying off thousands of workers. But like any crash diet, there are risks.
“Leaner is better,” Zuckerberg wrote in a 2,200-word memo last week announcing the company’s second round of major layoffs in four months.
The latest cuts, affecting about 10,000 employees and about 5,000 open positions, underscore the turnaround the company has made since last year, when its workforce had nearly doubled since the pandemic began.
Zuckerberg now wants a slimmed down meta – part of his “Year of Efficiency” – to be “an even bigger magnet for the most talented people” and a “place to invent the future”. Zuckerberg said that at Meta, the parent company of Facebook, Instagram and WhatsApp, “people will be more productive and their work will be more fun and fulfilling.”
But telling employees how sunny the future will be while looking over their shoulders won’t be good for them, for recruitment, or for the company as a whole, two management experts told Insider. Layoffs can distract workers, hamper innovation and erode morale. In other words, they said Zuckerberg’s plan was misguided.
The recent job cuts at tech companies underscores the mistakes many, including Meta, have made by hiring too quickly, Sandra Sucher, a professor of management practice at Harvard Business School who has looked at layoffs, told Insider.
“You have to step back and say, ‘What sane businessman is actually putting people at risk by doubling the size of his organization in two years?’” she said. “What conditions do you think would have to be met for this to be a reasonable bet?”
A slender — and meaner — Meta
Zuckerberg argues that “flatter is faster,” so Meta will cut several layers of management.
Sucher said that it makes sense to rethink the leadership of an organization and look for ways to move it forward faster, provided the organization does so thoughtfully.
Mark Zuckerberg wants 2023 to be Meta’s “Year of Efficiency.” Drew Angerer/Getty Images
But while Zuckerberg may have laid out a plan for a leaner, meaner management structure, he hasn’t offered many specific details on how the layoffs will play out. The cuts are expected to have an impact for months: some cuts will come at the end of April, but others at the end of May. And a small portion of the layoffs could last through the end of the year.
The latest cuts were not unexpected, but some workers were angered by the “cold” way the company was handling it.
Sucher said Zuckerberg was at risk of losing credibility with workers. “All he was trying to say is, ‘Trust me to make good decisions, and in the end I’ll let you know how that affected you,’” Sucher said.
Instead of resorting to layoffs, companies should look for other ways to reduce headcount, including natural attrition, acquisitions, and hiring freezes. She also said furloughs can be effective in helping businesses weather downturns.
Too often, she said, employers don’t work through all the ramifications — and hidden costs — that laying off employees will entail, in addition to the obvious strain on workers. “You have to plan it so it doesn’t kill your business,” Sucher said.
attempt at reinvention
At the heart of Zuckerberg’s memo is a key question: To what extent can the company truly reinvent itself?
Yes, it can change its name. And of course it can change its strategy. However, research suggests that most organizations have limited capacity for full-scale transformation. And the likelihood of Meta becoming a fundamentally different organization is slim, Anita Williams Woolley, professor of organizational behavior at Carnegie Mellon University’s Tepper School of Business, told Insider.
Zuckerberg’s recent moves are likely the result of his attempt to return to Facebook’s early days as a startup, she said. It’s understandable that he’s romanticizing a time when the company was more nimble and less bureaucratic.
But layoffs create uncertainty and distrust among both current and potential employees, Woolley said. Furthermore, “the bureaucracy that Zuckerberg believes he can eliminate is based on patterns and routines that are difficult to eliminate,” she said. “You don’t get rid of it by getting rid of people.”
So what should Zuckerberg do instead? “I would start a new company,” Woolley said. “I would ask him, ‘What are you trying to do that your current company can’t do right now?’ Then I would tell him to start a company to compete with.”
WATCH NOW: Insider Inc.’s Popular Videos
Loading…