Meta quietly reduces staff in cost-cutting push

Facebook’s parent company is looking to potentially shed hundreds of workers, sources say, while Google has required some employees to apply for new jobs.

Meta has begun quietly nudging out a significant number of staffers. Source: Getty Images.

Facebook owner Meta Platforms is planning to cut expenses by at least 10 per cent in the coming months, in part through staff reductions, as the social media giant confronts stalling growth and increased competition.

The company has begun quietly nudging out a significant number of staffers by reorganising departments and giving affected employees a limited window to apply for other roles within the company, according to managers familiar with the matter, in a move that achieves staffing cuts while forestalling the mass issuance of pink slips.

The reductions are expected to be a prelude to deeper cuts. While some savings will come from cuts to overhead and consulting budgets, much of it is expected to come from reduced employment.

The moves come after weeks of Meta executives discussing the need for hiring freezes and “ruthless prioritisation” of its business, while avoiding use of the word lay-offs.

In response to questions, Meta spokesman Tracy Clayton referred to CEO Mark Zuckerberg’s July statement that the company would need to reallocate resources toward corporate priorities as pressures mount on the business.

“We’ve been public about the need for our teams to shift to meet these challenges,” Mr Clayton said. He said giving displaced employees a period to apply for new jobs is a means of retaining talent that Meta might otherwise lose.

Among some Meta employees, the process of reapplying for jobs within a limited window internally is known as a sort of human resources purgatory they call the “30 Day List”.

Meta has long had a practice that employees whose roles are eliminated are subject to termination if they can’t find a new job internally within a month. Many other companies also make efforts to reassign employees whose groups are closed or restructured.

At Meta historically, it was usually only employees that were deemed undesirable who failed to land new positions. Now, workers with good reputations and strong performance reviews are being pushed out on a regular basis.

Meta reported having 83,553 employees at the end of the second quarter, up 32 per cent from a year ago.

As part of its own cost-cutting measures, Alphabet’s Google has also required some employees to apply for new jobs if they wish to remain at the company. Last week, Google told roughly half of the more than 100 employees at the company’s start-up incubator Area 120 they would need to find other jobs at the company within 90 days.

Google typically gives employees 60 days to apply for other roles in the company if their jobs have been cut, though Area 120 employees usually receive more time if their projects are cancelled.

In March, more than 1400 Google workers signed a petition demanding that the company extend the typical 60-day period to 180 days for a group of more than 100 employees in the cloud computing division, citing the “barriers to transfer that many workers face”.

A Google spokesman said almost 95 per cent of employees who expressed interest in staying with the company found new roles within the notice period. Alphabet had 174,014 employees at the end of the second quarter, up 20.8 per cent.

Chief Product Officer of Meta Chris Cox testifies during a hearing before Senate Homeland Security and Governmental Affairs Committee September 14, 2022 in Washington, DC. Alex Wong/Getty Images/AFP

In Silicon Valley, the staff reductions are notable after the biggest companies hired at breakneck speed through the pandemic.

With the economic climate cooling and the digital ad market in turmoil, the language from some prominent tech executives is now distinctly different.

“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” Mr Zuckerberg said in June. Separately, the company’s head of engineering issued a call for managers to identify employees who were coasting and place them on remediation plans as a prelude to their termination.

The memo’s brusque phrasing led to considerable jeering and angst in the company’s internal forums, according to posts viewed by The Wall Street Journal.

Meta’s share price is off more than 56.6 per cent so far in 2022, and the company’s market value has dropped more than $US685bn since its peak in September 2021.

Google has been more resilient but the search giant’s share price is also down 27.3 per cent over the past year. In July, Alphabet CEO Sundar Pichai said Google would slow hiring for the rest of the year and urged employees to be “more entrepreneurial”. Mr Pichai said at a conference earlier this month that he wanted the company to become 20 per cent more productive, without providing details on how he would measure the improvement.

Snap is among the outliers in publicly announcing lay-offs. The company last week said it would slash about 20 per cent of its staff after growing its headcount by around 65 per cent since the end of 2020.

“We must reduce our cost structure to avoid incurring significant ongoing losses,” CEO Evan Spiegel said in a memo to staff. He said the company was launching an opt-in talent directory to help departing employees find work outside the company.

Silicon Valley continues to be a competitive talent market, so finding ways to relocate employees within a company can produce benefits, said Allison Rutledge-Parisi, senior vice president of people at Justworks, a professional employee services company.

“It would be ridiculous for a company to jettison a group of people who they know, who they’ve managed, they have a relationship with, who’ve contributed, summarily without thinking through a methodology that would find them another place and another home within the organisation,” she said.

There are also potential downsides to having employees compete for a limited number of internal positions, including hits to productivity and morale, said Dave Fisch, CEO of careers site Ladders. “There’s going to be a lot of chatter, there could be a lot of animosity and finger pointing that naturally starts to arise,” Mr Fisch said.