Meta employees are bracing for sweeping job cuts after recent comments from executives suggested the company planned to significantly heighten performance expectations and "transition out" anyone who fell short.
Meta's human-resources chief, Lori Goler, sent a memo earlier this month suggesting cuts to employees who couldn't meet expectations as the company began to operate with "increased intensity," Insider has learned. Goler added that transitioning low performers out of Meta was the "right thing to do."
Cuts to head count could be as high as 10% this year, a person with knowledge of director-level conversations said.
"It hasn't started yet," one employee told Insider about cuts, "but it's coming."
Another employee described the feeling of a "witch hunt" at work in which engineering managers appear to be looking for people to cut as they suddenly and frequently mention performance expectations in team messages.
A different employee said Meta recently gave them an "offer to leave" the company, essentially a negotiated severance package. This person took the deal, instead of waiting to be cut later this year.
The people who spoke with Insider asked not to be identified because they were not authorized to speak publicly about the company. Their identities are known to Insider.
"We don't have any plans for layoffs at this time," a Meta spokesperson said.
"Any company that wants to have a lasting impact must practice disciplined prioritization and work with a high level of intensity to reach goals," the spokesperson added. "The reports about these efforts are consistent with this focus and what we've already shared publicly about our operating style."
Goler's memo directed managers to build high-performing teams, ruthlessly prioritize, and make the most of synchronous and asynchronous time with teams, according to an employee who viewed the memo.
Employees and investors will get more clues on the health of Facebook's business when it reports its second-quarter financial performance on Wednesday. Tech stocks have seen a widespread downturn amid inflation and fears of a recession. Facebook's stock has dropped 40% in just six months as it faces advertising challenges kicked off by Apple's privacy changes and deepened by Russia's invasion of Ukraine. Its metaverse segment lost $10 billion in a year.
Facebook, which last year changed its name to Meta Platforms, aggressively hired over the past two years. It hit more than 78,000 employees in March, an increase of about 30% from the year before. The company wanted to keep up with consumer demand amid the pandemic and remake itself as the company building "the metaverse," an immersive digital world that Mark Zuckerberg sees as the future (however distant) of the internet and his company.
In 2020, Facebook started an "adjusted expectations" program, allowing for more flexible metrics and performance targets. Employees could even choose to set their own goals below pre-pandemic expectations. But as the boom of the pandemic wanes, the company is moving away from this flexibility.
Meta employees previously said they expected layoffs in early May after the company put in place a partial hiring freeze and a companywide hiring slowdown, Insider first reported.
The company's chief financial officer, David Wehner, wrote in a memo about the freeze that the company would be "reprioritizing work" and "reviewing headcount allocation." This was soon after Zuckerberg mentioned publicly his feeling that fewer workers at Facebook would make it "a better company."
Late last month, Zuckerberg said during a weekly Q&A that the company would set "more aggressive goals" in an effort to weed out employees who couldn't meet them. About the same time, Chris Cox, Facebook's chief product officer, sent a memo saying the company would use "leaner, meaner, better executing teams."
Two weeks ago, Facebook's head of engineering, Maher Saba, directed all managers in an internal message to compile names of people on their teams seen as low or even "neutral" performers to be submitted to the company for review and then be put on a performance plan. Saba added that the process would "move to exit people who are unable to get on track."
"If a direct report is coasting or a low performer, they are not who we need; they are failing this company," Saba said. "As a manager, you cannot allow someone to be net neutral or negative for Meta."
At Meta's next earnings, Brian Nowak, a top analyst at Morgan Stanley, said he expected further revision of Facebook's revenue, estimating that the company would hit about $120 billion in revenue this year, down from a previous estimate of $125 billion. But he expects the company's TikTok rival, Reels, to start gaining traction, with revenue doubling next year to $2.6 billion, he added.
The best hope so far is that the second quarter "is the bottom" of Facebook's recent lack of user and revenue growth, Mark Shmulik, an analyst at Bernstein, said in a note.
"Expectations for Meta have tempered," he added.
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