‘Next AOL?’: Mass layoffs at Meta raise questions about Zuckerberg’s strategy as company morale dwindles

Massive layoffs at Meta raise questions about Mark Zuckerberg's strategy as company morale plummets.

Oliver Darcy, CNN

“Difficult period”.

Here’s how Mark Zuckerberg described in a memo what the near future will be like for Meta’s employees after he announced that the once impenetrable social media company will cut another 10,000 jobs in the coming months.

Zuckerberg, who is reviewing the business as he aims to fulfill his so-called “performance year,” has outlined key changes to be implemented across the organization. Most importantly, from a structural standpoint, Zuckerberg said he wants to flatten the company by “removing a few layers of management.”

“It’s going to be hard, and it’s impossible,” Zuckerberg said in his memo, hinting at the pain and raw emotion that will soon sweep the organization as the workforce is cut again.

The cuts to parent company Facebook, Instagram and WhatsApp came after about 11,000 employees were laid off in November, representing the company’s first-ever layoffs at the time. Combined with the new cuts, Meta will cut about 24% of its workforce, or one in four employees, in just six months.

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The Meta, in particular, is battling some of the most severe headwinds in Silicon Valley. The company has had to contend with an ever-weakening digital advertising sector amid wider economic turmoil, Apple’s unforgiving new privacy policies, the rapid emergence of artificial intelligence technologies, and the seemingly unstoppable growth of TikTok.

However, the layoff announcements naturally caused morale to plummet at the Menlo Park-headquartered company. The latest announcement, in particular, left already anxious employees upset and wondering if they might find themselves on the chopping block in the near future.

But Zuckerberg has signaled that drastic changes are needed to survive in what he described as a deteriorating economy that won’t bounce back anytime soon.

“At this point, I think we should brace ourselves for the possibility that this new economic reality will persist for many years,” Zuckerberg warned categorically, adding that the dim outlook required further cuts “in order to operate more efficiently than our previous downsizing to ensure success”.

The former CTO, who asked to remain anonymous to speak frankly, said on Tuesday that the likes of Meta, Google, Amazon and Twitter have hired a “stupid amount of people” over the past few years to work on “science projects.” Speaking specifically about the Met, the executive said, “Are you just wondering what these 100,000 people are doing? The app doesn’t change much.”

“These companies are becoming extremely profitable, and their leaders think there are many other areas they can expand into as part of their plan for world domination,” the top manager said. “And then the economy takes a turn and everyone starts to care about profitability and growth.”

As a result, the tech lead said, “Surprisingly, it’s not hard for these big tech companies to lay off large numbers of people without impacting their core revenue engine.”

For now, Meta employees will have to wait a bit to see how this will affect them and their teams. Zuckerberg indicated that the job cuts would not be completed until the end of May.

“As far as how we should proceed during this period, I encourage each of you to focus on what you can control,” Zuckerberg advised. “That means doing great work and supporting your teammates. Our community is extremely resilient.”

“Change is never easy,” he added, “but I know that we will get through this and become an even stronger company that can create better products faster and allow you to do the best job of your career.”

The more important question going forward is whether Meta can truly emerge from this painful phase as a stronger company — or instead continue its slow decline as its core products reach maturity, while Zuckerberg chases the hope that one day his big bet on the metaverse will come true.

“You can shorten your path to profitability in the short term,” said the former CTO. “But you can’t short cut your path to growth. Does it feel like the next AOL at some point? And I don’t know when that might be.”

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