Meta Platforms Inc.’s ‘Year of Efficiency’: Navigating Cost-Cutting Amidst a Rapidly Changing Landscape
By With the pandemic upending the global economy, tech giants Amazon, Apple, Facebook, Google and Microsoft have seen collective profits rise by 55% in 2021 from an already staggering baseline.[0] With a collective $1.4 trillion in sales, the companies have become the world’s 13th largest economy, overtaking Australia.[0]
In light of the tough macroeconomic environment, Facebook’s parent company, Meta Platforms Inc., is taking on a bloated management structure that it has realized is not terribly efficient or effective.[1] CEO Mark Zuckerberg has called this the “Year of Efficiency” and laid off 13% of its workforce, in addition to cutting its office space.[2] 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.[3] The process is known as “flattening”, and involves transitioning managers and directors to individual contributor jobs or leaving the company.[4]
The move has already paid off for the company, as its share price has recovered from its worst year ever. It has seen an increase of 56% in the year so far[5] However, the uncertainty surrounding job losses is affecting the morale of the employees and Meta has been delaying finalising the budgets of various teams as it is reportedly gearing up for a fresh round of job cuts.
Implementing hiring freezes and reducing perks are the straightforward aspects.[0] For big tech companies to become innovative again, they must spearhead a shift in culture away from protecting mini-fiefdoms and more toward getting ideas in motion and product features out the door.[6] This is an entirely new challenge for the mostly technocrat leaders of these companies.[0]
Meta’s “Year of Efficiency” plan is a reminder of the challenge ahead for Silicon Valley’s biggest firms.[7] While cost-cutting is part of the equation, the real challenge is becoming more efficient and effective in order to remain competitive in a rapidly changing landscape.
0. “Layoffs Alone Won’t Solve Tech’s Problems” The Washington Post, 7 Feb. 2023, https://www.washingtonpost.com/business/layoffs-alone-wont-solve-techs-problems/2023/02/07/fdd70a28-a6d5-11ed-b2a3-edb05ee0e313_story.html
1. “Meta Takes Aim at Bosses Who Don't Actually Do Anything” VICE, 8 Feb. 2023, https://www.vice.com/en/article/bvm9mw/meta-takes-aim-at-bosses-who-dont-actually-do-anything
2. “Meta to Tell Many Managers to Start Coding or Get Out — Here's What Else the ‘Flattening' Will Bring” Entrepreneur, 9 Feb. 2023, https://www.entrepreneur.com/business-news/meta-to-tell-many-managers-to-start-coding-or-get-out/444700
3. “Meta to ask many managers to become individual contributors or leave” Economic Times, 7 Feb. 2023, https://economictimes.indiatimes.com/tech/technology/meta-to-ask-many-managers-to-become-individual-contributors-or-leave/articleshow/97706661.cms
4. “Meta to Ask Many Managers to Become Individual Contributors or Leave” Bloomberg, 7 Feb. 2023, https://www.bloomberg.com/news/articles/2023-02-07/meta-to-ask-many-managers-to-become-individual-contributors-or-leave
5. “Meta is ‘flattening’ its workforce and telling high-level managers to transition to a new role or get out as Mark Zuckerberg leans in to his ‘Year of Efficiency’” Fortune, 7 Feb. 2023, https://fortune.com/2023/02/07/meta-mark-zuckerberg-flattening-managers-transition-new-roles-efficiency/
6. “Layoffs alone won’t solve tech’s problems” Moneycontrol, 8 Feb. 2023, https://www.moneycontrol.com/news/opinion/layoffs-google-amazon-apple-facebook-microsoft-solve-problems-10032041.html
7. “A Clear Target Emerges in Tech Layoffs: Middle Managers” Yahoo! Voices, 6 Feb. 2023, https://www.yahoo.com/now/clear-target-emerges-tech-layoffs-211012456.html
