Meta
- Recent layoffs at Meta are a sign that some employers are willing to make recurring cutbacks.
- That's a change from a prior "big cuts" mentality.
- Ongoing layoffs hurt morale and aren't a solid long-term strategy, a labor expert told BI.
The hashtag affixed to Andy Welfle's LinkedIn photo says it all: #sickofthisshit.
Welfle wrote earlier this month that he was laid off from Microsoft after only nine months. Before that, he'd also spent nine months at Cruise — before being laid off.
His dual layoffs might have been worse than what many others experienced, but Welfle is hardly alone in getting hit by what appears to be some employers' penchant for regular layoffs, particularly in Silicon Valley.
One of the latest examples comes from Meta, which said Wednesday it was rejigging some of its biggest businesses. The changes mean lost jobs at Instagram, Reality Labs, and WhatsApp.
It wasn't clear how many roles were eliminated. A Meta spokesperson told Business Insider on Wednesday that the company was looking for other positions for affected workers.
After shedding workers in sweeping layoffs in late 2022 and early 2023, many tech companies are adopting a more methodical, department-by-department approach to making cuts. Major firms, from Google to Amazon to Microsoft, have announced sizable reductions followed by more modest trimming.
Take Google. The tech giant's parent company, Alphabet, began 2023 by cutting some 12,000 jobs, or about 6% of its workforce. It has followed that large cut with smaller reductions this year.
Art Zeile, CEO of the tech career marketplace Dice, told BI that some of the biggest companies in the industry have determined that certain departments aren't sufficiently profitable any longer. As a result, companies need to redirect resources to growth areas like artificial intelligence.
"It is a shifting of bets," he said. This routine trimming of jobs here and there is the new normal — for now, Zeile said.
Unsurprisingly, even with growth in some areas, the drip-drip of reductions in the last couple of years appears to be making some tech workers nervous. In a new survey from Indeed, 40% of respondents said they expected to be hit if their company conducted layoffs. Seven in 10 said they would start looking to other employers if their company made layoffs.
Indeed surveyed more than 1,100 US tech workers from early to late June.
A costly decision
Linsey Fagan, senior talent strategy advisor at Indeed, told BI that most of the recurring layoffs are in tech. That's likely because many companies in the industry grew so fast during the pandemic and are still making adjustments.
But those recurring cuts don't come without costs, Fagan said.
"It's definitely not a sustainable strategy," she said.
Fagan noted that employee sentiment starts to drop before a layoff as workers suspect cuts are coming. Then, after the layoffs are made, workers' feelings about the company — and a CEO's acumen — take "a long-term dive," she said.
"When you look at a business trying to come back from that — if they're continuously laying off, it simply can't happen," Fagan said.
Even smaller-scale layoffs can make workers jittery, she said. Fagan also noted that the rise of technologies like generative AI and the threat of layoffs are pushing many in tech to want to build their skills.
In a departure from the past, tech workers looking for jobs on Indeed are now more likely to apply to staffing firms, which might offer temporary gigs, or to areas like healthcare than to tech firms, she said.
Fagan said some tech workers are drawn to the flexibility that contingent or part-time roles can offer. Yet, ultimately, she said, tech is the #1 industry tech workers historically want to work in.
However, "they're just not feeling that stability right now," Fagan said.
Why they do it
Some companies' penchant for undergoing regular nips and tucks could be because Wall Street often celebrates that type of trimming.
At Meta, CEO Mark Zuckerberg was "beautifully rewarded" by the market for making cuts, Dice's Zeile said, noting the rise in the company's stock price.
Beyond what investors might cheer, the tech giants are also getting older and no longer in growth mode, when their aim was often to snap up workers. Hence, many companies made cuts following the rush of hiring during the pandemic.
Since then, some bosses have been looking to trim the size of their organizations and otherwise make improvements. Zuckerberg famously declared that 2023 would be the company's "year of efficiency." He also said the directive would become an ongoing feature, not a bug.
It's not all bad news for tech jobs
Zeile said that investors will eventually look to tech companies to do more than boost profits by trimming costs and want to see a return to growth. He said that's when hiring will pick up broadly because companies might have many areas in need of workers.
For now, a company like Meta might be cutting in some areas, but it's growing elsewhere, Zeile said.
"Meta is actually on a tear right now. They're just no longer hiring VR engineers. They are hiring AI engineers, so they've actually boosted their hiring," he said.
Indeed's Fagan said a sign that the tech industry might be closer to stabilizing is that after declining for several years, job postings in areas like software development have remained flat in recent months, though they're still 30% below 2020 levels. Of course, that means there are fewer opportunities for laid-off workers. Still, she said, it's also an indication that companies are being careful not to hire too many people.
"It's not like they're going out and massively hiring and then doing layoffs," Fagan said.
For his part, Welfle, who was laid off from Microsoft, wrote on LinkedIn that he's looking for a content design role — maybe with a smaller company. He also said some of his recent feelings are similar to those he experienced after his prior layoff in December.
"I'm having a hard time disentangling my sense of value and self-worth from my identity as a corporate worker. But I'll definitely be reflecting on that, and finding gentler, more sustainable ways to exist in a capitalist society," he wrote.
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