As Meta embarks on its “year of efficiency,” the tech giant is taking a unique approach to its upcoming round of layoffs.
CEO Mark Zuckerberg shared a staff memo on Tuesday, announcing an impending restructuring that would flatten Meta’s orgs, cancel lower priority projects, and reduce hiring. The tech giant will also lay off 10,000 employees and close 5,000 open roles over the next several months, marking its second round of layoffs since November.
Zuckerberg’s announcement is quite unorthodox, as typical layoff announcements tend to happen as close to the reduction in force as possible.
“Organizations do like to typically have the announcements be as close as possible to when the actual decision and action is being undertaken, to minimize potential pain points with the employee population,” says George Penn, managing vice president at Gartner’s HR practice. He says offering more lead time is risky and can result in a drop in productivity and even bad behavior.
On the other hand, one could argue that Meta is promoting a culture of open and honest communication, building trust between employee and employer, which in turn creates engaged workers committed to the company’s vision.
“Last fall, we heard feedback that you wanted more transparency sooner into any restructuring plans, so that’s what I’m trying to provide here,” Zuckerberg wrote. “I hope that giving you a timeline and principles for what to expect will help us get through the next couple of months and then move forward as we implement these changes that I believe will have a very positive impact on how we work.”
Weighing the risks
Announcing layoffs months in advance poses several risks to a company. Employee engagement and productivity often tank following job cuts and can take months to recover. Premature layoff announcements are likely to generate even more disruption.
“You've already got a very precipitous drop that's going to occur, and now, with [an] early announcement but without action being taken, you're extending the duration of that disengagement and that drop in productivity and performance,” Penn says.
Current and former Meta employees shared stories of internal turmoil as early as Tuesday. “There’s a lot of uncertainty, there’s a lot of anger, and there’s the question many folks are asking: ‘How do you expect me to do work for the next two months while wondering if I will still have a job?’,” Erin Sumner, a former Meta employee who had spoken with current employees, told the New York Times.
While announcing layoffs well in advance gives employees time to seek employment elsewhere—and saves employers their severance cost in return—companies also risk losing high-performing and high-potential talent. “These are individuals who know their worth in the marketplace and will immediately begin to test the marketplace if they believe they will be at risk or that their part of the organization will be at risk,” says Penn.
To Meta’s credit, these are likely risks it has taken into account. Zuckerberg acknowledged that sharing such plans ahead of time could create challenges for the company. “I’ve tried to be open about all the work that’s underway, and while I know many of you are energized by this, I also recognize that the idea of upcoming org changes creates uncertainty and stress,” he wrote. “My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead.”
Scott Hamilton, global managing director of Gallagher's human resources and compensation consulting practice, argues that Zuckerberg's announcement is a strategic one that might not be solely for the transparency benefit. The memo signals a larger business change, and its scope extends beyond a workforce reduction announcement.
“I think that [Zuckerberg has] weighed the risks of destabilization versus what he needs to have happen in the investment community to restore some confidence and faith in his vision and what he's trying to execute,” Hamilton says. “He's weighed the risks of instability, and he's decided that more importantly, out of this instability, he wants a leaner, in-person, innovative framework for the future to come out of this.”
Layoff communications typically focus on three audiences: employees, senior leadership, and investors. For employees, in particular, Zuckerberg’s message is clear. “Meta wants to get the next round of innovation going, and it wants to get the next layers of growth and a new revenue model because the one it's got today seems to be under duress,” says Hamilton.
Emerging trend or corporate anomaly?
Meta’s announcement stands out from the layoff communications of its peers, though it’s still soon to say if others will follow suit.
“There's nothing in our data or patterns that I've seen in conversations with our clients that would point to [a trend],” Penn says. Most organizations use generalized business language to suggest a reorganization is underway instead, he adds. For example, they discuss restructuring and new opportunities to drive efficiency without explicitly mentioning layoffs.
Smaller organizations are unlikely to replicate Meta’s approach. “Zuckerberg seeks to achieve an audacious goal: to innovate at scale. However, for startups that, by definition, lack scale and whose leaders are already player-coaches, Meta’s efficiency playbook is unlikely to apply full-stop,” says Ed Montoya, senior partner at the executive search consultancy Kingsley Gate Partners.
But Meta is far from the only tech company to undergo a recent metamorphosis as it chases resourcefulness. Twitter slashed about half of its staff after Elon Musk’s takeover, and the CEO hasn’t been shy about his desire to thin ranks.
Larger tech companies needing rapid innovation and areas to cut costs may find themselves mimicking Meta. “I think there may be opportunities for folks to do this if they're in a similar circumstance, but it's going to depend on their appetite and the employee workforce appetite,” Hamilton says. “These things can have dramatic consequences if they're not well thought out, [but] I think this communication was well thought.”
