What You Can Learn from the Meta Layoffs


Meta, the parent company of Facebook, cut 13% of its workforce, which amounts to layoffs of 11,000 employees. Meta CEO Mark Zuckerberg informed workers on Wednesday in a letter. Unfortunately, Meta joins Twitter, Peloton, and a number of others in laying off employees at a time of historically high inflation in the United States. The case study of these layoffs provide a roadmap for HR leaders seeking to conduct layoffs of remote and hybrid workers. 

Obviously, letting people go, upending their livelihood and careers, is a major decision and should be a last resort. By virtually all accounts that was the case for Meta. CNBC reports that Meta shares dropped about 20% after revelations of fourth quarter earnings. Costs and expenses had syrocketed 19% year-over-year in the third quarter to $22.1 billion.

READ: How to Kindly Conduct Layoffs

What HR and business leaders can glean from Meta’s situation is that business goals matter. HR leaders who can align talent management with business objectives and have foresight about risks being taken have an edge. They might be able to prevent the need for large-scale layoffs by being more conservative in hiring from the start. 

A Need for Conservative Hiring

In the case of Meta, Zuckerberg led the company to focus on the Metaverse. He explains in the letter about the layoffs that he believed the pandemic accelerated e-commerce and online ventures. As a result, Meta put heavy investment into the Metaverse, a virtual world that allows people to interact as avatars in an augmented reality. 

The plan ended up backfiring because there was pent-up demand for in-person interactions following two years of shutdowns and quarantines during the pandemic. In addition, many in the tech sector have suggested the technology for virtual reality has improved but still must advance to reach its full potential. This is an example of how HR leaders must have business sense and work closely with the CEO to assess business objectives, risks, and budgets as major projects are launching. 

Early in the pandemic, economists warned that inflation could rise significantly once the world had a grip on COVID-19. What was unclear was when this might happen and how it would influence the jobs market and cost of living. Many, however, could not see past the pandemic.

Certainly, tech companies that gained major boosts when everyone was forced to stay in their homes, work online, and rely on online groceries and goods, had poor vision about the future. At the same time, in the late stages of the pandemic, companies experienced a labor shortage. Some still are without enough workers. This makes for a weird, looming recession. People still feel badly about the economy because of the high costs of necessities. Overall, the jobs market is still pretty strong and the GDP rose slightly in the last quarter. 

In other words, HR leaders should pay attention to these market indicators as they hire. They should try to have foresight about what may come next. They must assess risk. But they cannot predict everything in this uncertain world. 

Taking Responsibility

Another lesson from the Meta layoffs is how Zuckerberg took responsiblity for the decisions that led to this moment. He was transparent about how he came to the conclusions he did regarding the Metaverse and shouldered the blame for the cuts and financial challenges. 

“Unfortunately, this did not play out the way I expected,” Zuckerberg writes in the letter that CNBC published in its entirety. “Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that.”

READ: 10 Strategies for Dealing with Layoffs

In addition, he apologized for the layoffs and expressed sorrow for the people, who lost their jobs. He also thanked them for their contributions. Zuckerberg has been villified in the press, and he does sometimes come off as robotic or uncaring. He definitely is not held up as an example of empathetic leadership. 

However, he did all the right things in this situation. HR leaders can take away the lesson that they should guide managers and leaders to have humility and be sympathetic when letting people go. It’s the human thing to do.

Providing Severance Packages

Most importantly, Meta followed the law by providing warning of layoffs and cuts. They also offered decent severance packages to laid off employees. They will receive 16 weeks of pay plus an addition two weeks for every year of service. The company will cover the health insurance of laid off employees for up to six months. Offering such a severance package helps to cushion the fall. 

Transparency about the Future

The future, at least in the short term, is dark for Meta. The company must make some hard decisions to protect its future. Therefore, Zuckerberg shared that the company is extending its hiring freeze with few exceptions and will begin cutting discretionary spending. Layoffs always trigger employee concern about the future of their own jobs. Therefore, HR leaders must be open to questions and willing to answer honestly when those who are still working at the company express concerns. 

Photo by Andrea Piacquadio for Pexels

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