Meta has scaled back its hiring plans and is “turning up the heat” on underperforming employees as the firm prepares for a “deep economic downturn.”
As reported by the Reuters news agency, Mark Zuckerberg, CEO of the company previously known as Facebook, told staff in a weekly Q&A: "If I had to bet, I'd say that this might be one of the worst downturns that we've seen in recent history”.
Meta has reduced its target for hiring engineers in 2022 to around 6,000-7,000, down from an initial plan to hire about 10,000 new engineers, Zuckerberg said.
Meta confirmed hiring pauses in broad terms last month, but exact figures have not previously been reported.
In addition to reducing hiring, he said, the company was leaving certain positions unfilled in response to attrition and "turning up the heat" on performance management to weed out staffers unable to meet more aggressive goals.#
"Realistically, there are probably a bunch of people at the company who shouldn't be here," Zuckerberg said.
"Part of my hope by raising expectations and having more aggressive goals, and just kind of turning up the heat a little bit, is that I think some of you might decide that this place isn't for you, and that self-selection is OK with me," he said.
The company must "prioritize more ruthlessly" and "operate leaner, meaner, better executing teams," Chief Product Officer Chris Cox wrote in the memo, which appeared on the company's internal discussion forum Workplace before the Q&A.
"I have to underscore that we are in serious times here and the headwinds are fierce. We need to execute flawlessly in an environment of slower growth, where teams should not expect vast influxes of new engineers and budgets," Cox wrote.
The memo was "intended to build on what we've already said publicly in earnings about the challenges we face and the opportunities we have, where we're putting more of our energy toward addressing," a Meta spokesperson said in a statement.
Meta joins a growing list of major firms scaling back their growth plans as a result of recent economic concerns. CNBC recently reported that Alphabet, the parent company of Google, would “slowing the pace” of its hiring plans for the rest of 2022.
CEO Sunder Pichai told employees in an email that it would reduce its hiring rate going forward, having taken on 10,000 new staff in the second quarter of this year already.
Goldman Sachs has also ‘slowed down’ its recruitment plans and reintroduced annual performance reviews in a bid to weed out underperforming workers.
As reported by Bloomberg, the Wall Street behemoth’s CFO, Denis Coleman, told analysts during a recent conference call: “Given the challenging operating environment, we are closely re-examining all of our forward spending and investment plans to ensure the best use of our resources.”
Coleman added: “We’re taking a number of actions to improve our operating efficiency. Specifically, we have made the decision to slow hiring velocity and reduce certain professional fees going forward.”
In addition, the firm reportedly plans to bring back annual performance reviews for staff, which had been dropped during the pandemic.
Prior to their abandonment, these reviews were typically used to identify and weed out Goldman Sachs’ worst-performers.
The moves, Goldman Sachs CEO David Solomon explained, were part of a plan to more carefully manage the company’s resources, as rising inflation and tumbling profits continue to hinder the company. Indeed, the firm’s second quarter profits plunged from $5.3billion in the same period last year, to $2.8bn - a drop of 48%.
“I expect there’s going to be more volatility and there’s going to be more uncertainty and in light of the current environment we will manage all our resources cautiously,” he said.