In January 2025, Meta’s CEO, Mark Zuckerberg, announced layoffs to staffs who failed to meet their performance targets. This step was designed to achieve Meta’s workforce reduction goals of around 3,600 employees, or about 5% of the total. Rather than presenting the layoff plan as it was, Zuckerberg tried to convince the audience that only non-performing employees would be impacted, but as the process of downsizing employee numbers unfolded, it soon became clear that the narrative of smooth transitioning was wrong. In reality, many employees who had received positive reviews, and who would not be termed as low performers, ending up being laid off instead. This massive lay offs caused a lot of confusion and anger among those affected.
Initial Intent of Zuckerberg’s Message Trimming the Bottom End of the Workforce
Zuckerberg’s intent was categorically stated during the ultimatum: in this cycle of retrenchment, the employees on the radar are those who do not meet the performance threshold, and do not contribute value towards the company. In an internal memo to Bloomberg, he stated that, “We often dismiss people over the course of a year for underperformance. But now we are going to do much more during this cycle.” The explanations meted out by the company suggested that steps would only be taken to ‘lose’ those employees who did not meet the Benchmark Outperformance, which would enable Meta to work towards efficiency and retain their best resources.
In retrospect, this sounded logical. After all, every industry and established multinational corporation utilizes some form of PIP (performance improvement plan) and dismisses employees found to fail its thresholds within the specified period. When carried out, cutting costs, minimizing losses, and in general, staying the course becomes a stress free objective towards any business. In practice, however, this turned out to be far more complex than that.
Shifts of Focus Toward Meta’s ‘Year of Efficiency’
This set of layoffs is in line with Zuckerberg’s announcement in 2023 that would be a ‘year of efficiency’ including 10,000 cuts. Though Zuckerberg maintained that these cuts were different and specifically targeted low performers so that Meta could retain their best. Still, despite the rhetoric of having cut for non performance, it appears that other reasons, like change of direction for the company, contributed for the layoffs as well.
Meta has increasingly paid attention to AI as a key focus area for the company, which has led to an increase in the hiring of machine-learning engineers. This might explain some of the cuts in roles that were made, particularly those that were peripheral to the company’s core objectives. As Meta’s Chief Financial Officer, Susan Li, said on the January 29 investor call, the company is focused on expanding the technical core of the firm in automation and engineering to meet company’s strategic needs.
There is also an aspect of nondiscrimination in the cuts where employees with less sophisticated or less important functions were eliminated. The reasoning behind that is there has been heightened focus on performance appraisal cuts in headcount.
The Significance of Openness and Reputation in Dismissals
The foremost concern regarding Meta’s business strategy, when it comes to layoffs, is that there seems to be zero openness on the whole process and that employees were labeled as ‘low performers’ in a bid to brand them. Diane Brady, executive director of Fortune Live Media, maintained that it is best to allow people to exit with dignity and let them go without branding them as underachievers. “There’s something to be said for letting people leave with their dignity intact rather than branding them as subpar performers,” Brady wrote in her CEO Daily newsletter. “People do tend to turn supporters of businesses that look after their ex-employees rather than foes.”
Explaining the standards set for layoffs would reduce the confusion and anger employees feel. Meta could explain the logic behind the cuts they made, and thereby avoid losing their name and the dignity of those employees who got laid off, along with maximizing their profits on reputation.
Conclusion
Meta is clearly trying to increase their efficiency in its continuing restructuring and expansion of the business. But perhaps the single most important element to improving the way organizations conduct layoffs is being open as well as paying more attention to how the restructuring is perceived and enacted.
