Meta is set to lay off thousands of employees in the coming days as part of a cost-cutting effort to fuel its heavy investment in artificial intelligence. The company's CEO, Mark Zuckerberg, has implemented a 'Year of Efficiency' focusing on performance improvement and streamlining operations.
Meta is preparing for significant job cuts in the coming days, aiming to streamline its operations and allocate resources for continued heavy investment in artificial intelligence (AI). The company has disclosed plans to eliminate approximately 5% of its workforce, potentially affecting nearly 4,000 employees.
CEO Mark Zuckerberg initiated a drive in January to enhance performance standards and swiftly remove underperforming employees, as outlined in an internal memo reviewed by Business Insider. This move aligns with a broader trend among major tech companies, including Microsoft, Amazon, and Salesforce, to reduce their workforce after a period of aggressive hiring during the pandemic.Zuckerberg declared 2023 as the 'Year of Efficiency,' a commitment that has extended through last year and into 2025. This renewed focus on operational efficiency has been met with favor by Wall Street, driving Meta's share prices to record highs since the beginning of 2023, adding over $1 trillion to the company's market valuation. While Meta maintained profitability through previous periods of substantial hiring and expenditure, the company is now facing intense competition in the rapidly evolving generative AI landscape. This race necessitates billions of dollars in infrastructure and related investments, likely pressuring Zuckerberg to explore cost-saving measures elsewhere.However, Meta's efficiency drive is causing anxiety among some employees, who spoke anonymously to Business Insider due to the sensitive nature of the topic. One current employee described Zuckerberg's approach as creating a culture of fear, where loyalty to him is paramount. Another employee likened the current work environment to a George Orwell novel, citing widespread self-censorship and a decline in the human element of their work. Concerns have been raised that employees, even those who have performed well, are being dismissed without clear explanations, leaving their reputations potentially tarnished. Employees fear that good performers may be cut simply to meet predetermined quotas, leading to a decrease in morale and a lack of motivation to invest in new hires. The impending job cuts are specifically targeting employees who receive 'Met Some' or 'Did Not Meet' ratings, the lowest two categories in Meta's performance review system. Internal guidance obtained by Business Insider last month revealed that managers are obligated to identify 12% to 15% of employees falling into these categories. Meta aims to achieve 10% 'non-regrettable attrition' through a combination of these cuts and existing departures. For instance, if a team experiences 5% attrition in 2024, managers would need to identify an additional 7% to 10% of their employees for the lowest ratings to meet the overall target. This forced identification of employees for potential layoff has amplified anxiety among both managers and regular employees.On Friday, employees received a memo from Janelle Gale, Meta's vice president of HR, outlining the procedure for the job cuts. According to the memo, obtained by Business Insider, affected employees will be notified via both their work and personal email addresses and will lose access to company systems within an hour of receiving the notification. They will also receive information about their severance package in the same email. The notifications will be staggered according to time zones, with employees in the Asia Pacific region being informed first, followed by Europe, the Middle East, and Africa, and lastly, North and Latin America. Employees in European countries, including Germany, France, Italy, and the Netherlands, will be exempt from this process due to local regulations and will instead adhere to their respective local performance management processes. Meta intends to fill these vacant positions but states that the plans and timelines 'may vary.'Concurrently, Meta is also restructuring some of its business units and divisions. The company is integrating its Reality Labs division more closely with its core business, reversing some of Zuckerberg's 2021 reorganization. At the same time, Meta is reshuffling its Messenger, Facebook, and generative AI teams. The company is merging its Facebook and Messenger teams under the leadership of Facebook chief Tom Alison, while Messenger head Loredana Crisan will transition to the generative AI group, according to The Information. Meta's Reality Labs division, which has incurred nearly $60 billion in losses since 2020, is being more tightly integrated with Meta's main business operations
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