Meta gives 7,000 employees subpar reviews as more layoffs loom
Meta may not be done with job cuts. The company has given signs of more belt-tightening by giving around 7,000 employees subpar ratings in the recently concluded performance reviews. With Mark Zuckerberg terming 2023 the "year of efficiency," the possibility of more layoffs cannot be ruled out. To note, the company fired about 11,000 employees in November last year.
Why does this story matter?
Meta had a tough 2022 due to uncertain economic conditions and falling advertising revenue. However, the company showed signs of recovery in the last quarter of 2022 with better-than-expected quarterly results. Zuckerberg made it clear that the company will be chasing austerity this year. The only question is, will the company target inefficient projects or inefficient people to get back on track?
10% of employees received the second-lowest rating
Meta's performance review has five possible ratings. The lowest rating is "meets some," which is rare. The second-lowest rating is "meets most." Those who receive "meets most" twice in a row are placed on performance improvement plans, while those who get the lowest ratings are placed automatically on improvement plans. Per Wall Street Journal, Meta managers gave 10% of employees a "meets most" rating.
Meta always had a goal-based, high-performance culture: Spokesperson
A Meta spokesperson told the Wall Street Journal, "We've always had a goal-based culture of high performance, and our review process is intended to incentivize long-term thinking and high-quality work, while helping employees get actionable feedback." Some employees see the recently wrapped performance review as Zuckerberg's return to his old self. He had a reputation for delivering direct and ruthless feedback before the pandemic.
Bonus based on the company's performance was cut by 15%
As part of the performance review, Meta has also reduced one component of annual employee bonuses. The bonus based on the company's performance would be paid out at 85% of its target. At 85%, it is 15% down compared to the year prior. It is below 100% for the first time since 2018. The only time it had gone this low was in 2012.
Low ratings might push employees out of Meta
Meta executives believe low ratings would push many employees out of the company. Per Wall Street Journal, some employees within Meta see a low rating as a sign to look for new opportunities. Zuckerberg recently talked about flattening the company's organizational structure and removing different "layers of middle management." It is unclear whether the review specifically targeted middle management or not.
