Meta, Facebook's parent company, is cutting another 10,000 employees and closing 5,000 open positions in the belief that a leaner organization will be more efficient. But it is also trying to flatten its organization and reduce management layers, which is a strategy that could backfire on the company, one expert said.
Meta singled out recruiters for reductions, as it did last November during a similar layoff of 11,000 workers.
This layoff, described by Meta as 13% of its workforce, could be more specific to Meta's internal issues than any broader economic problems. But at 21,000 workers in less than 12 months, it does mean that Meta's layoffs exceed other technology companies, including Microsoft's cut of 10,000 workers and Google's cut of 12,000 employees in January.
"Since we reduced our workforce last year, one surprising result is that many things have gone faster," wrote Mark Zuckerberg, Meta CEO, in a blog post detailing the latest round of cuts. Facebook employed more than 86,000 people at the close of 2022.
Zuckerberg also explained how Meta was growing and the negatives that came with it.
"It's tempting to think that a project is net positive as long as it generates more value than its direct costs," Zuckerberg wrote. "But that project needs a leader, so maybe we take someone great from another team or maybe we take a great engineer and put them into a management role, which both diffuses talent and creates more management layers."
Cutting risk aversion
He wrote "flatter is faster" and "it's well-understood that every layer of a hierarchy adds latency and risk aversion in information flow and decision-making."
But flatter doesn't mean automatic success, and Meta will be trading one set of risks for another, said Saerom Lee, an assistant professor of management at The Wharton School of the University of Pennsylvania, in an email.
"Yes, the potential downside of having many management layers is that these layers can add latency and risk aversion," Lee said. "In other words by delaying the decision-making process and by filtering out more information, it can increase omission errors," which means "not investing in promising projects with positive returns.
"However, the potential upside of having these [management] layers is that these layers help firms reduce commission errors," or investment "in projects that could be extremely costly to the company and hurt its reputation and survival."
Lee explained the problem with a drip coffee-making analogy. The more filters (management layers) used, the longer it takes to make the coffee, and the more likely tasty flavors are lost. But more filters also means less opportunity for undesirable components (such as grounds) to make it into the final product.
"In terms of Facebook it seems that this company is trying to decrease omission errors (be more entrepreneurial), at the potential cost of increasing commission errors (making potentially irreversible decisions and risking its current business)," Lee said.
Layoffs hit recruiters
One analyst said that this second layoff, coming so quickly after the first, may indicate a management mistake.
"When Facebook made the first set of cuts, they didn't go deep enough," said Victor Janulaitis, CEO at Janco Associates Inc., a labor market research firm in Park City, Utah.
Typically when companies cut a little more than needed, it's so they can start hiring people again, according to Janulaitis.
There is a lack of understanding of what recruiters do and the vital role they play within an organization even when hiring slows down.
Madeline LauranoFounder and chief analyst, Aptitude Research
With respect to recruiters, Zuckerberg explained that "with less hiring, I've made the difficult decision to further reduce the size of our recruiting team."
Madeline Laurano, founder and chief analyst at Aptitude Research, said that automation and technology might have a role in recruiting layoffs. She said there is still a bigger reason recruiting teams are a target.
There "is a lack of understanding of what recruiters do and the vital role they play within an organization, even when hiring slows down," Laurano said.
Recruiting teams are now responsible for workforce planning; internal mobility; and diversity, equity, inclusion and belonging initiatives, Laurano said.
Laurano said in her firm's surveys of recruiters, 58% "believe that their leadership does not understand their role in the company."
How many technically skilled workers will lose their jobs in Meta's latest round of cuts is unknown. But government data suggests the company is keeping many of their technical workers.
The tech occupation unemployment was 1.5% in January after a series of layoffs by tech firms, according to a recent analysis of government data by CompTIA, an industry group.
If high-skilled tech workers are getting cut, the low unemployment rate is "an indication many laid-off workers were re-hired and absorbed back into the labor market," CompTIA said in its analysis.
Patrick Thibodeau covers HCM and ERP technologies for TechTarget Editorial. He's worked for more than two decades as an enterprise IT reporter.
