Meta, which owns Facebook, gave thousands of employees below-average ratings in a recently completed round of performance reviews, a sign that more job cuts could be on the way, according to sources close to the company.
The company also cut bonus metrics, according to the sources, one of several measures senior executives are taking after Chief Executive Mark Zuckerberg declared 2023 to be a “year of efficiency”.
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Meta’s leadership expects the reviews to prompt more employees to leave in the coming weeks, according to the sources. The social network owner will consider another round of layoffs if there aren’t enough. About 11,000 workers, about 13% of employees, were recently laid off.
Meta’s performance review process validates what the company has communicated to employees, said a spokesman for Mark Zuckerberg’s company. “We’ve always had a goal-based, high-performance culture, and our review process is aimed at encouraging long-term thinking and high-quality work, helping employees get actionable feedback,” he said.
The recently ended performance reviews were seen as a return to form for Zuckerberg, who, before the pandemic, had developed a reputation for giving direct feedback to workers. One former employee described the process as a return to the “OG Mark” or “old school Zuck”.
We are working to flatten our organizational structure and remove some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive.
Mark Zuckerberg, speaking to investors earlier this month
Since last year, Meta executives have suggested that underperformers won’t last at the company. “Realistically, there are probably a lot of people at the company who shouldn’t be here,” Zuckerberg said in June 2022.
Meta’s managers gave approximately 10% of employees a “serves best” rating, sources said. There are five possible ratings on Meta, and “serves most” is the second lowest.
The lowest — “meets a few” — is rare, the sources said. Workers who receive two “serve more” ratings in a row are placed in performance improvement plans, and those who receive a lower rating are automatically placed in the plan.
Within Meta, some employees consider this classification as a signal to look for new job opportunities.
In conjunction with performance reviews, Meta informed employees that one component of employee bonuses – company performance – would be paid at 85% of its target, according to people familiar with its payment method.
This number is one of three used to determine each employee’s annual bonus. At 85%, it is down at least 15 percentage points from a year earlier and below 100% for the first time since the first half of 2018, according to sources familiar with the numbers. The only other time the company-wide multiplier has dropped this much was in the first half of 2012.
The company has struggled over the past year and a half, facing increasing competition from Chinese rival TikTok and declining demand for advertising amid a difficult macroeconomic climate. The company’s prospects have started to improve since it emphasized artificial intelligence technologies in 2022 to bolster its ad targeting and content recommendation tools.
Since April 2021, Meta has grappled with the effects of Apple’s ad tracking changes, which the social media company said last year would cost an estimated $10 billion in revenue in 2022. of revenue year on year.
Marne Levine, the company’s business director during that period, said on Monday (13) that she will step down at the end of this month and leave the company in the American summer, that is, in mid-June.
Meta responded to its difficult financial situation in November when it announced the layoffs. It also tightened its belt by reducing office space, shifting to sharing desks for some employees and extending the hiring freeze through the first quarter of 2023.
The changes began to take effect. Despite a continued decline in revenue, Meta posted fourth-quarter net income of $4.7 billion this month, up from the previous quarter.
That broke a streak of three quarters in which profit had retreated from the previous quarter – a decline unlike any the company had experienced in a decade.
With information from The Wall Street Journal
Featured image: rafapress/Shutterstock
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