Meta Layoffs And More: Can Mark Zuckerberg & Big Tech CEOs Get A Reality Check?
Meta Platform shares which lost more than 70% of USD 1000 bn valuation last year, bounced up by 5% post layoffs
The Quint DAILY
For impactful stories you just can’t miss
Nothin' lasts forever
And we both know hearts can change
And it's hard to hold a candle
In the cold November rain
— Guns N Roses, November Rain
If you want to sack someone, get advice from Mark Zuckerberg, not Donald Trump.
"You are fired!" is a line made famous by the former US President when he was a real estate tycoon hosting the Shark Tank TV show for wannabe entrepreneurs. Everyday American capitalism is slightly better, with HR executives saying, "I am afraid we have to let you go." —which can translate as "We can't really afford you".
Of late, I have learned from an Instagram post that the newest way to lay off people is to say, "You are no longer in a go-forward role."
Never mind the language, if you are a believer in the Shakespearean maxim of 'What's-in-a-name' but after reading the Meta Platforms' CEO's direct communication to laid-off employees following 11,000 job cuts or 13% of the Facebook company's workforce, I believe sensitivity and empathy do matter, and so does accountability.
Zuckerberg takes full ownership of what he says has been a bad commercial call, explains the reasons for the layoffs, and lists out benefits to those being shown the door. Not a bad way to say goodbye. The language and details are sensitive and caring throughout.
"There is no good way to do a layoff, but we hope to get all the relevant information to you as quickly as possible and then do whatever we can to support you through this," says the man who made 'social network' an everyday term and inspired someone to make an Oscar-winning movie out of his college-day enterprise.
Is Mark Following Musk’s Lead?
Zuckerberg may have taken a 'how-not-to-do-things' lesson from Elon Musk, who fired about 7,500 Twitter employees in an impersonal act that showed ruthless intent in what is, clearly, a season of layoffs in the tech-driven business world. Everybody from India's EdTech startup BYJU's to global giants—Microsoft, Snap, and Intel is reported to be laying off people.
Amazon and Google are said to be either slowing or freezing new hires as talks of recession loom large in inflation-hit Western economies that face a harsh new reality after the Covid-19 pandemic led to easy monetary policies that upset calculations on growth and employment.
This slew of layoffs bring a simple message for employees: You get roses sometimes and face guns on the other times. It just so happens that Zuckerberg's company bore the biggest hit, thanks to his disproportionate bets on growth and futuristic technologies.
What Meta’s Soaring Stocks Post Job Cuts Reveal
You gotta love this hoodie guy with big dreams and feet apparently on the ground, but make no mistake. This is capitalism is at work, and there is no way the market will forgive you just because you have your heart in the right place.
The market includes demand for shares, demand for goods and services and demand for work — and a slump in demand means fewer goods, less service demand, slower revenue growth, less return on shares, lower pay raises and fewer jobs.
But equally true, tighter belts lead to higher returns in the stock market, kicking off what one might hope is a longer-term virtuous cycle.
Meta Platform shares which have lost more than 70% of its USD 1000 billion valuation achieved last year, bounced up by 5% on news of the layoffs, and at least, one smart analyst in a respected investment site using conservative yardsticks, sees an upside of up to USD 30 billion in Meta's market capitalisation from the current valuation of around USD 270 billion.
Imagine, Meta Platforms have lost enough market value over the past one year for Zuckerberg to have easily bought up a dozen Twitters at the price for which Elon Musk groaned, moaned and then roared into his controversial deal.
A Roller-Coaster Ride for Major Tech Platforms
The wisdom for entrepreneurs in what some dub a 'mini-dotcom-bust' this year (after the startup bubble that burst circa 2000) is that a linear growth assumption is not valid just because new technologies are doing gee-whiz stuff.
There is a complex set of reasons for Meta's surge and fall in the market: From easy interest rates during the pandemic years to simplistic growth calculations to spending too much on futuristic technologies. We can't go hair-splitting here on all that as market analysts do. Suffice it to say, that Wall Street is a roller-coaster and the sober folks have a long-term edge over those excited by their own ideas.
Google transformed itself into Alphabet while keeping its core search engine in shape as it took bets on new technologies such as renewable energy and satellite imaging.
Meta Platforms are betting on the emerging "metaverse" focused on virtual reality even as it milks its core social networking/lifestyle blogging sites such as Facebook and Instagram for advertising revenue. Sadly for Zuckerberg, he tripped on a stone while aiming for the stars.
There is plenty of digital technology steam still in Facebook and other high-tech companies, but this does not mean employees will enjoy it all. They are part of the solution sometimes, and part of the problem at other times. When the Zuckerbergs of the world have their reputation on the block, humbler geeks need to worry about their own jobs and careers.
(The writer is a senior journalist and commentator who has worked for Reuters, Economic Times, Business Standard, and Hindustan Times. He can be reached on Twitter @madversity)
(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)
Read and Breaking News at the Quint, browse for more from opinion
Topics: Inflation Facebook Mark Zuckerberg
Subscribe To Our Daily Newsletter And Get News Delivered Straight To Your Inbox.