The cost-cutting continues, and I'm bullish. Here's Bloomberg.
A ‘flattening’ is taking place as Mark Zuckerberg aims for greater efficiency
Meta Platforms Inc. is asking many of its managers and directors to transition to individual contributor jobs or leave the company as it tries to become more efficient, according to people familiar with the matter.
The process is known internally as a “flattening,” the people said. Higher-level managers are sharing the directive with their subordinates in the coming weeks, separate from the company’s regular performance reviews that are currently underway, said the people, who asked not to be named discussing a matter that wasn’t public. Individual contributors aren’t in charge of others, and instead focus on tasks like coding, designing and research.
Meta, which owns Facebook and Instagram, fired 13% of its workforce in November during its first major layoff. In the months since, staff have faced intense anxiety about the potential for future cuts, the people said. Meta Chief Executive Officer Mark Zuckerberg explained during the company’s earnings report this month that he still felt the organization was too slow-moving and bloated. He called 2023 the “Year of Efficiency” and vowed to cut middle-managers and underperforming projects.
The current round of job cuts will be more gradual, enacted on an individual basis, the people said. Some Meta employees said they felt the change was needed given the organization includes some teams that compete to achieve similar goals and managers that oversee only one or two employees, the people said. Meta declined to comment.
Zuckerberg’s plan for a leaner organization helped the share price recover from 2022, which was its worst year ever. It’s up more than 56% so far this year.
Criticism of Meta's efficiency is not new. Here is John Carmack, the “consulting CTO for the company's virtual reality efforts in 2019 after Meta acquired Oculus in 2014. He had previously been Oculus' CTO. Carmack left Meta in 2022 and has since turned his focus to artificial intelligence through his startup Keen Technologies.”
“I was having some real issues at Meta with large-scale strategic directions,” Carmack said in an interview with the business publication, Dallas Innovates. “I'm sure you've seen some of the headlines about how much money they're spending, and I thought large fractions were really poorly spent.” […]
“I have never been able to kill stupid things before they cause damage, or set a direction and have a team actually stick to it,” Carmack said in the memo.
Carmack also said at the time that the company has “a ridiculous amount of people and resources, but we constantly self-sabotage and squander effort.”
“There is no way to sugar coat this; I think our organization is operating at half the effectiveness that would make me happy,” he said.
It is turning out Zuckerberg is becoming much more responsive to shareholders at this point than his peers after all the share price destruction. Google's headcount actually rose sequentially by 3K additional employees last quarter despite the large layoffs.
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