8 ms·

Meta delays setting team budgets as Facebook parent plans fresh round of layoffs

101 points by djkivi 4y ago

dannyr 4y ago
Meta's stock is up over 40% this year.
- epgui 4y ago
  Mind fleshing out how you think that relates to this article? One is left guessing at what you mean.
- onion2k 4y ago
  Stock prices reflect a prediction about future profitability or company value, not how nice the company is. The stock going up shows that people who invest in Meta think layoffs will increase profits. That's all.
- berkle4455 4y ago
  So are Tesla, Nvidia, Uber, Shopify, Cloudflare, Spotify, Roku, Zillow, and Coinbase to name a few. It’s almost like nearly all tech stocks have bounced.
  - nostrademons 4y ago
    Because investors are expecting the Fed to cut rates this year, which benefits growth stocks much more than value stocks, since future cash flows are discounted by less. If the expected rate cuts don't materialize, this group of stocks is likely to crash hard again.
  - newaccount2021 4y ago
    [dead]
supernova87a 4y ago
> "Meta did not immediately respond to a Reuters request for comment outside of normal business hours." Just to air a side gripe, I don't know why journalists and/or editors think statements like this are helpful in the least. Did you ask them 1 hour before your deadline? Was it a week ago? Are we to gain some better understanding or infer something by your inclusion of this caveat, other than to get a superficial cover-your-ass "we asked them at some vague time we can't be bothered to state, and haven't heard back yet"? Back to the substantive content, this article can be summarized by the first sentence of it, minus the regurgitated 2/3 of the rest of the story. "We heard someone in some division say their budgets aren't final yet, so we're guessing that more cuts are possible."
- epgui 4y ago
  It’s a basic courtesy that shows some amount of good faith, and helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it. It’s not necessarily suggestive of much, but it’s respectful and useful for context.
  - filoleg 4y ago
    >[It] helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it. I agree that this would be the case, but only if they were a bit more explicit about the amount of time they gave to the company to respond. Which, I believe, is the entire point the grandparent comment is making. As the article currently stands, it makes it sound like the company was reached out to, but ended up not responding, which might be indicative of something on their end. Initially, I assumed the typical cowardly corporate "better just ignore and not reply due to the advice from legal" approach and an implied silent admittance of the anonymous info in the article being truthful. And then I re-read the article after seeing the grandparent comment, and realized that the article author admitted that they only attempted reaching out to the company outside of business hours, likely on a saturday (given that the article sources another article that broke those "news" earlier the same day). That turned my initial impression a full 180, with the only factual takeaway from that article being that Meta employees responsible making official public statements on behalf of the company observe weekends off.
dzink 4y ago
I wonder if all of these layoffs have to do with this tax change: https://beenegarter.com/rd-expense-capitalization-remains-applicable-for-2022-are-you-prepared/ https://beenegarter.com/rd-expense-capitalization-remains-ap... Software engineering as an R&D expense can no longer be used in the same year, or has to be deprecated. If companies are trying to look profitable compared to bonanza years, they can’t be paying a bunch more to the government for extra engineers hired when the rule was still in place.
- dboreham 4y ago
  Doubtful. Aren't companies judged on EBITDA?
  - lotsofpulp 4y ago
    Sometimes, by some people, for some purposes. Buffett and Munger have been notably skeptical of its usefulness for a long time: https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-are-lots-of-troubles-coming-because-of-too-much-wretched-excess.html https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-a... https://finance.yahoo.com/news/charlie-munger-warren-buffett-ebitda-205053585.html https://finance.yahoo.com/news/charlie-munger-warren-buffett... https://seekingalpha.com/article/4326833-earnings-lies-and-why-munger-says-ebitda-is-bull-s https://seekingalpha.com/article/4326833-earnings-lies-and-w...
- eclipxe 4y ago
  No
- karmelapple 4y ago
  I think it’s certainly a possibility. And the reality of this has been quite the discussion point during our small company’s tax and budget planning. The tinfoil hat side of me wonders if this was done to possibly provide cover / a reason to do the layoffs. Someone lobbied for this. Congress had bipartisan support for extending the R&D carveouts for software development last session. Yet they didn’t. Why not? They probably just ran out of time in the lame duck session… but still, why not go for a bipartisan win? Perhaps could be that tech companies are the ones legislators are comfortable sacrificing at the moment, although it seems they’d want to attack the big tech giants and not impact every company doing software development. I don’t get it.
forgetme2020 4y ago
There's a lot of buzz from folks who work there about Zuckerberg emphasizing flattening the hierarchy and making job cuts a routine part of operations i.e. much like say IBM or Cisco routinely trim in a way that most of their cuts don't make the news
- eclipxe 4y ago
  Job cuts are already part of the culture. There are non-regretful attrition targets and the bottom 10-16% or so each year either need to improve or will get fired.
_trackno5 4y ago
Not too surprising more lay offs are coming. I joined Facebook in 2017 and they had around 40k people (left in 2020). By 2022 they had 80k. I met with my first manager (he’s a director now) at FB a few weeks after the lay offs were announced and even he was totally puzzled as to why Meta hired so many people. In his own words, he couldn’t see what all those extra people were doing. I do wonder if that number of employees is just inflated due to Meta acquiring a bunch of companies (VR)
- ChuckNorris89 4y ago
  Same with many other well funded unicorns and scale-ups where my friends got hired in the hiring spree from 2020 - 2022, especially in the crypto and stock space. They hired too fast and the new hires didn't have the chance to get ramped up to speed at all so most of the heavy lifting was still done by those with longer tenure in the company who knew the systems well but were too busy to keep it running and sprinting on adding new features to have time to bring the new hires up to speed, so the new hires were idling for moths doing nothing while collecting golden paychecks. Probably now the companies realized they overhired, for an economic future that didn't pan out, and are now correcting this as they can still run profitably with the workforce they had before the mass hiring spree which brought them no benefits.
  - adamors 4y ago
    Problem with these layoffs are tho that they will affect long tenured folk as well as newish hires. Dumb decision after dumb decision.
    - ChuckNorris89 4y ago
      As someone else here said it, and as I've learned from my friends in management, layoffs aren't purely random. They're letting go of the people who's compensation is higher than the value the company perceived the employee adds or fails to add to the company relative to their compensation. If you've negociated an amazing compensation at the hight of the hiring boom aka the great resignation, when the market was red hot, but your performance reviews aren't stellar, chances are you're on your way out. But if you haven't negociated a high raise in the last few years and you're getting great performance reviews, chances are you're staying. It's relatively clear cut. No company is letting go of people who do great work at market rate. They're letting go of people they perceive to be underperforming relative to their above market rate wages. It's that simple. We can go into semantics that your performance review in most cases never accurately reflects the value you add or don't add to the company, but this has always been like that, especially in the large companies where the big layoffs are happening. You're always at the mercy of your manager giving you great reviews.
exodust 4y ago
On a side note, I was curious to know the design story behind the Meta logo. Found the page below explaining the branding, and how the logo can be used in motion. But why would they choose to display the animated logo as a 97 megabyte animated GIF? I know times are tough and people need to be laid off, but I suggest retaining at least one person who understands why it's not cool to post a 97 MB GIF of your main logo. https://design.facebook.com/stories/designing-our-new-company-brand-meta/ https://design.facebook.com/stories/designing-our-new-compan...
- pcthrowaway 4y ago
  If you're talking about the first gif on that page[1], it's only 1.6 MB [1]: At the time of checking: https://scontent.fyvr5-1.fna.fbcdn.net/v/t39.8562-6/248814656_249743847178667_2939325260132690749_n.gif?_nc_cat=110&ccb=1-7&_nc_sid=6825c5&_nc_ohc=xF1An5w0GCoAX-Bktgx&_nc_ht=scontent.fyvr5-1.fna&oh=00_AfCsqSUhGb8IYOQC-yo20MUupTTrPnTP0IFjeg8DE2tyEQ&oe=63EE93C1 https://scontent.fyvr5-1.fna.fbcdn.net/v/t39.8562-6/24881465...
  - exodust 4y ago
    Funny how you stopped checking after the first gif....didn't scroll any further?! I'm talking about the second gif on the page. The big one. The 90+ meg one!
    - pcthrowaway 4y ago
      Admittedly, I did get bored reading about Meta's branding
iamflimflam1 4y ago
We always used to joke that layoffs always come in threes. The first one never cuts deep enough. People do the bare minimum. The second one comes when everyone realises that the business actually is in trouble and does need saving. The third one is needed as the business has been so badly damaged by the layoffs and is now bleeding cash.
- rapsey 4y ago
  Often true but Facebook is not bleeding cash though. They are printing money. They are just very bloated.
  - eastbound 4y ago
    Isn’t Facebook the company of $300k-a-year developers? These jobs practically didn’t exist before Facebook-Google. Are we in a situation where we might see the previous normal come back, ie $150k when you’re a manager slaving away and that’s it?
    - SilverBirch 4y ago
      It's actually really difficult to run a business that is hugely profitable and to keep wages under control. This is less of a "Facebook" thing and more of a "highly profitable company" thing. The reason wages at FAANG are high is because they make a shit tonne of money, and since they've got that much money they can just pay top engineers more than competitors. There's a limit to that - which is how much money are they making. But if Meta decide they're just going to pay everyone less, what happens? Everyone leaves and goes to Google. What happens if Google decides to pay less? They go off to Microsoft or Amazon. So they can all afford these high salaries - because the company makes a tonne of money, and they have a clear downside to not paying these salaries- they lose top talent. The cases where other companies are paying less are entirely down to actual hardnosed business, they pay less because they expect to hire less good people and that's a good trade off in a business that isn't reliant on engineering talent. Intel coasted for about a decade not competing for the best talent, why? Because their sales strategy was what dominated the profitability of the company. Eventually they lost their engineering edge and now the company is in the toilet, but that wasn't really a mistake, it was a deliberate choice by management to control costs rather than invest to innovate.
bubbleRefuge 4y ago
>The WhatsApp owner had cut more than 11,000 jobs or 13% of its workforce in November, following such tech companies as Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) which have announced thousands of layoffs due to the economic downturn. What economic downturn? Certainly none in the US by most metrics.
- chupchap 4y ago
  > What economic downturn? Someone closed the interest free money faucet
- baq 4y ago
  Hard landing? Soft landing? No landing at all more like!
- bagels 4y ago
  The same kind that fuels 40B buybacks. Sure, inflation is up, but these companies are still wildly profitable. Perhaps they are preparing for winter, but it's not completely here today.
- roncesvalles 4y ago
  If you repeat a lie often enough it becomes the truth.
andrewstuart 4y ago
Layoffs should be done once.
doubtfuluser 4y ago
Pretty funny to me that in the article it speaks about “the WhatsApp owner” almost as if there are now enough people who might not really know Facebook anymore…

101 points by djkivi 4y ago

dannyr 4y ago

Meta's stock is up over 40% this year.

epgui 4y ago
Mind fleshing out how you think that relates to this article? One is left guessing at what you mean.
onion2k 4y ago
Stock prices reflect a prediction about future profitability or company value, not how nice the company is. The stock going up shows that people who invest in Meta think layoffs will increase profits. That's all.
berkle4455 4y ago
So are Tesla, Nvidia, Uber, Shopify, Cloudflare, Spotify, Roku, Zillow, and Coinbase to name a few. It’s almost like nearly all tech stocks have bounced.
- nostrademons 4y ago
  Because investors are expecting the Fed to cut rates this year, which benefits growth stocks much more than value stocks, since future cash flows are discounted by less. If the expected rate cuts don't materialize, this group of stocks is likely to crash hard again.
- newaccount2021 4y ago
  [dead]

supernova87a 4y ago

> "Meta did not immediately respond to a Reuters request for comment outside of normal business hours." Just to air a side gripe, I don't know why journalists and/or editors think statements like this are helpful in the least. Did you ask them 1 hour before your deadline? Was it a week ago? Are we to gain some better understanding or infer something by your inclusion of this caveat, other than to get a superficial cover-your-ass "we asked them at some vague time we can't be bothered to state, and haven't heard back yet"? Back to the substantive content, this article can be summarized by the first sentence of it, minus the regurgitated 2/3 of the rest of the story. "We heard someone in some division say their budgets aren't final yet, so we're guessing that more cuts are possible."

epgui 4y ago
It’s a basic courtesy that shows some amount of good faith, and helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it. It’s not necessarily suggestive of much, but it’s respectful and useful for context.
- filoleg 4y ago
  >[It] helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it. I agree that this would be the case, but only if they were a bit more explicit about the amount of time they gave to the company to respond. Which, I believe, is the entire point the grandparent comment is making. As the article currently stands, it makes it sound like the company was reached out to, but ended up not responding, which might be indicative of something on their end. Initially, I assumed the typical cowardly corporate "better just ignore and not reply due to the advice from legal" approach and an implied silent admittance of the anonymous info in the article being truthful. And then I re-read the article after seeing the grandparent comment, and realized that the article author admitted that they only attempted reaching out to the company outside of business hours, likely on a saturday (given that the article sources another article that broke those "news" earlier the same day). That turned my initial impression a full 180, with the only factual takeaway from that article being that Meta employees responsible making official public statements on behalf of the company observe weekends off.

dzink 4y ago

I wonder if all of these layoffs have to do with this tax change: https://beenegarter.com/rd-expense-capitalization-remains-applicable-for-2022-are-you-prepared/ https://beenegarter.com/rd-expense-capitalization-remains-ap... Software engineering as an R&D expense can no longer be used in the same year, or has to be deprecated. If companies are trying to look profitable compared to bonanza years, they can’t be paying a bunch more to the government for extra engineers hired when the rule was still in place.

dboreham 4y ago
Doubtful. Aren't companies judged on EBITDA?
- lotsofpulp 4y ago
  Sometimes, by some people, for some purposes. Buffett and Munger have been notably skeptical of its usefulness for a long time: https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-are-lots-of-troubles-coming-because-of-too-much-wretched-excess.html https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-a... https://finance.yahoo.com/news/charlie-munger-warren-buffett-ebitda-205053585.html https://finance.yahoo.com/news/charlie-munger-warren-buffett... https://seekingalpha.com/article/4326833-earnings-lies-and-why-munger-says-ebitda-is-bull-s https://seekingalpha.com/article/4326833-earnings-lies-and-w...
eclipxe 4y ago
No
karmelapple 4y ago
I think it’s certainly a possibility. And the reality of this has been quite the discussion point during our small company’s tax and budget planning. The tinfoil hat side of me wonders if this was done to possibly provide cover / a reason to do the layoffs. Someone lobbied for this. Congress had bipartisan support for extending the R&D carveouts for software development last session. Yet they didn’t. Why not? They probably just ran out of time in the lame duck session… but still, why not go for a bipartisan win? Perhaps could be that tech companies are the ones legislators are comfortable sacrificing at the moment, although it seems they’d want to attack the big tech giants and not impact every company doing software development. I don’t get it.

forgetme2020 4y ago

There's a lot of buzz from folks who work there about Zuckerberg emphasizing flattening the hierarchy and making job cuts a routine part of operations i.e. much like say IBM or Cisco routinely trim in a way that most of their cuts don't make the news

eclipxe 4y ago
Job cuts are already part of the culture. There are non-regretful attrition targets and the bottom 10-16% or so each year either need to improve or will get fired.

_trackno5 4y ago

Not too surprising more lay offs are coming. I joined Facebook in 2017 and they had around 40k people (left in 2020). By 2022 they had 80k. I met with my first manager (he’s a director now) at FB a few weeks after the lay offs were announced and even he was totally puzzled as to why Meta hired so many people. In his own words, he couldn’t see what all those extra people were doing. I do wonder if that number of employees is just inflated due to Meta acquiring a bunch of companies (VR)

ChuckNorris89 4y ago
Same with many other well funded unicorns and scale-ups where my friends got hired in the hiring spree from 2020 - 2022, especially in the crypto and stock space. They hired too fast and the new hires didn't have the chance to get ramped up to speed at all so most of the heavy lifting was still done by those with longer tenure in the company who knew the systems well but were too busy to keep it running and sprinting on adding new features to have time to bring the new hires up to speed, so the new hires were idling for moths doing nothing while collecting golden paychecks. Probably now the companies realized they overhired, for an economic future that didn't pan out, and are now correcting this as they can still run profitably with the workforce they had before the mass hiring spree which brought them no benefits.
- adamors 4y ago
  Problem with these layoffs are tho that they will affect long tenured folk as well as newish hires. Dumb decision after dumb decision.
  - ChuckNorris89 4y ago
    As someone else here said it, and as I've learned from my friends in management, layoffs aren't purely random. They're letting go of the people who's compensation is higher than the value the company perceived the employee adds or fails to add to the company relative to their compensation. If you've negociated an amazing compensation at the hight of the hiring boom aka the great resignation, when the market was red hot, but your performance reviews aren't stellar, chances are you're on your way out. But if you haven't negociated a high raise in the last few years and you're getting great performance reviews, chances are you're staying. It's relatively clear cut. No company is letting go of people who do great work at market rate. They're letting go of people they perceive to be underperforming relative to their above market rate wages. It's that simple. We can go into semantics that your performance review in most cases never accurately reflects the value you add or don't add to the company, but this has always been like that, especially in the large companies where the big layoffs are happening. You're always at the mercy of your manager giving you great reviews.

exodust 4y ago

On a side note, I was curious to know the design story behind the Meta logo. Found the page below explaining the branding, and how the logo can be used in motion. But why would they choose to display the animated logo as a 97 megabyte animated GIF? I know times are tough and people need to be laid off, but I suggest retaining at least one person who understands why it's not cool to post a 97 MB GIF of your main logo. https://design.facebook.com/stories/designing-our-new-company-brand-meta/ https://design.facebook.com/stories/designing-our-new-compan...

pcthrowaway 4y ago
If you're talking about the first gif on that page[1], it's only 1.6 MB [1]: At the time of checking: https://scontent.fyvr5-1.fna.fbcdn.net/v/t39.8562-6/248814656_249743847178667_2939325260132690749_n.gif?_nc_cat=110&ccb=1-7&_nc_sid=6825c5&_nc_ohc=xF1An5w0GCoAX-Bktgx&_nc_ht=scontent.fyvr5-1.fna&oh=00_AfCsqSUhGb8IYOQC-yo20MUupTTrPnTP0IFjeg8DE2tyEQ&oe=63EE93C1 https://scontent.fyvr5-1.fna.fbcdn.net/v/t39.8562-6/24881465...
- exodust 4y ago
  Funny how you stopped checking after the first gif....didn't scroll any further?! I'm talking about the second gif on the page. The big one. The 90+ meg one!
  - pcthrowaway 4y ago
    Admittedly, I did get bored reading about Meta's branding

iamflimflam1 4y ago

We always used to joke that layoffs always come in threes. The first one never cuts deep enough. People do the bare minimum. The second one comes when everyone realises that the business actually is in trouble and does need saving. The third one is needed as the business has been so badly damaged by the layoffs and is now bleeding cash.

rapsey 4y ago
Often true but Facebook is not bleeding cash though. They are printing money. They are just very bloated.
- eastbound 4y ago
  Isn’t Facebook the company of $300k-a-year developers? These jobs practically didn’t exist before Facebook-Google. Are we in a situation where we might see the previous normal come back, ie $150k when you’re a manager slaving away and that’s it?
  - SilverBirch 4y ago
    It's actually really difficult to run a business that is hugely profitable and to keep wages under control. This is less of a "Facebook" thing and more of a "highly profitable company" thing. The reason wages at FAANG are high is because they make a shit tonne of money, and since they've got that much money they can just pay top engineers more than competitors. There's a limit to that - which is how much money are they making. But if Meta decide they're just going to pay everyone less, what happens? Everyone leaves and goes to Google. What happens if Google decides to pay less? They go off to Microsoft or Amazon. So they can all afford these high salaries - because the company makes a tonne of money, and they have a clear downside to not paying these salaries- they lose top talent. The cases where other companies are paying less are entirely down to actual hardnosed business, they pay less because they expect to hire less good people and that's a good trade off in a business that isn't reliant on engineering talent. Intel coasted for about a decade not competing for the best talent, why? Because their sales strategy was what dominated the profitability of the company. Eventually they lost their engineering edge and now the company is in the toilet, but that wasn't really a mistake, it was a deliberate choice by management to control costs rather than invest to innovate.

bubbleRefuge 4y ago

>The WhatsApp owner had cut more than 11,000 jobs or 13% of its workforce in November, following such tech companies as Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) which have announced thousands of layoffs due to the economic downturn. What economic downturn? Certainly none in the US by most metrics.

chupchap 4y ago
> What economic downturn? Someone closed the interest free money faucet
baq 4y ago
Hard landing? Soft landing? No landing at all more like!
bagels 4y ago
The same kind that fuels 40B buybacks. Sure, inflation is up, but these companies are still wildly profitable. Perhaps they are preparing for winter, but it's not completely here today.
roncesvalles 4y ago
If you repeat a lie often enough it becomes the truth.

andrewstuart 4y ago

Layoffs should be done once.

doubtfuluser 4y ago

Pretty funny to me that in the article it speaks about “the WhatsApp owner” almost as if there are now enough people who might not really know Facebook anymore…