Staff reductions across Silicon valley after hiring at breakneck speed
Meta Platform Inc., Alphabet Inc.'s Google, as well as Snap Inc., reveal that staff cuts are happening with a lot of positions being slashed.
People with knowledge of the company's plans claim that Meta Platforms Inc. is aiming to reduce expenses by at least 10% in the upcoming months, including through laying off employees, as the social media titan deals with stagnant growth and competitive pressures.
According to current and former managers familiar with the matter, California-based company Menlo Park has begun quietly removing a significant number of employees by reorganizing departments and offering affected employees a narrow window to apply for other roles within the company, in a move that accomplishes staffing cuts while avoiding the mass issuance of pink slips.
Those familiar with the company's plans also noted the cutbacks are believed to be a precursor to bigger cuts. While some savings are projected through cutbacks to overhead and consultancy budgets, the majority is likely to come from decreased employment.
The measures follow weeks of public discussion by Meta executives about the necessity for hiring freezes and "ruthless prioritization" of its business while avoiding the term "layoffs."
In response to inquiries, Meta spokesperson Tracy Clayton cited CEO Mark Zuckerberg's July comment that the corporation will need to reallocate resources toward corporate goals as commercial constraints grow.
“We’ve been public about the need for our teams to shift to meet these challenges,” Clayton said adding that the offer for employees to apply for new jobs within the company is an attempt to retain talent.
He declined to disclose how many staff were affected by the latest "changes."
Formerly, only personnel deemed undesirable were unable to get new roles at Meta. However, now workers with solid reputations and great performance reports are being driven out on a regular basis, according to impacted employees and managers.
At the end of the second quarter, Meta said it had 83,553 employees, up 32% over the same period last year.
Alphabet Inc.'s Google has also prompted certain employees to seek new positions if they want to stay at the company. This comes as part of Alphabet's own cost-cutting measures. According to individuals familiar with the decision, Google notified about half of the more than 100 employees at the firm's startup incubator Area 120 last week that they would need to find new roles inside the enterprise within 90 days.
More than 1,400 Google employees signed a petition in March urging that the firm extend the standard 60-day span to 180 days for a set of more than 100 employees in the cloud computing department, citing "barriers to transfer that many workers face."
According to a Google representative, about 95% of employees who indicated an interest in remaining with the business found other jobs within the notice period. At the conclusion of the second quarter, Alphabet employed 174,014 employees, a 20.8% increase over the previous year.
Staff cutbacks are noticeable in Silicon Valley after the largest firms engaged in hiring practices at a breakneck pace during the pandemic. Tom Allison, the head of the Facebook app, issued a document titled "Why is Hiring So Hard Right Now?" in May 2021.
Allison expressed concern about a "major supply and demand imbalance between our hiring needs and talent availability." With the lack of engineers at an all-time high, the firm was recruiting additional recruiters, but even those were difficult to come by, he wrote.
With the economy cooling and the digital-ad market in disarray, the tone of several major IT leaders has shifted dramatically.
“Realistically, there are probably a bunch of people at the company who shouldn’t be here,” CEO Mark Zuckerberg said at a company town hall in June. Separately, the company’s head of engineering issued a call for managers to identify employees who were coasting and place them on remediation plans as a prelude to their termination.
As of Tuesday's stock market's closure, Meta's share price had fallen more than 56.6% in 2022, and the company's market value had plunged more than $685 billion from its peak in September 2021.
Google has been more robust, although its share price has fallen 27.3% in the last year. Sundar Pichai, CEO of Alphabet, announced in July that Google will restrict recruiting for the remainder of the year and asked staff to be "more entrepreneurial."
Pichai stated earlier this month at a conference that he wanted the firm to become 20% more productive, although he did not specify how he would assess the increase.
Snap Inc. is one of the anomalies when it comes to openly reporting layoffs. The firm said last week that it will lay off around 20% of its workforce after increasing its headcount by approximately 65% since the end of 2020.
"We must reduce our cost structure to avoid significant ongoing losses," CEO Evan Spiegel said in a note to employees. He stated that the corporation will be developing an opt-in talent database to assist leaving employees in finding jobs outside of the company.
A new report exposes how #Twitter, #Facebook, #TikTok, #Reddit, and various other platforms hire ex-spies and make the platforms they work for effectively less neutral and more biased. pic.twitter.com/HwG1lxCQVn— Al Mayadeen English (@MayadeenEnglish) July 1, 2022
Finding methods to transfer personnel inside a firm may provide benefits in Silicon Valley, according to Allison Rutledge-Parisi, senior vice president of people at Justworks, a professional employee services company.
“It would be ridiculous for a company to jettison a group of people who they know, who they’ve managed, they have a relationship with, who’ve contributed, summarily without thinking through a methodology that would find them another place and another home within the organization,” she said.
There are also potential downsides to having employees compete for a limited number of internal positions, including hits to productivity and morale, said Dave Fisch, chief executive of careers site Ladders. “There’s going to be a lot of chatter, there could be a lot of animosity and finger pointing that naturally starts to arise,” Fisch said.