by - A new hiring freeze has some people inside Facebook concerned that layoffs are on the way.
- One worker said the freeze is merely a stopgap measure as executives “set priorities.”
- Other factors, such as executive vagueness and the market downturn, are also adding to the concerns.
With a broad hiring freeze, some Facebook workers are increasingly concerned that layoffs could be next.
The company told employees last week in memos viewed by Insider that it was enacting a hiring pause that would first affect many levels of engineers and expand to impact “almost every team in the company.”
“I guess layoffs are coming,” an employee told Insider. Some senior managers are already “talking about reprioritizing things,” the person added, leading them to expect projects being canceled and people being laid off.
Certain elements of last week’s freeze memos also have people worried and trying to read between the lines, three employees said. Facebook CFO David Wehner wrote that the company needs to hit a “lower spending guideline,” which it recently cut by about $3 billion. Other vague phrases, such as “reprioritize work,” “review staffing,” and calling the recent stock market downturn “a valuable strength feature,” also struck an ominous note among some employees.
Facebook CFO David Wehner between Zynga co-founder Mark Pincus and Mark Zuckerberg at the Allen & Company conference on July 7, 2016 in Sun Valley, Idaho.
(Photo by Drew Angerer/Getty Images)
Wehner said she would share more details with employees “as we get them,” while Miranda Kalinowski, Facebook’s head of recruiting, wrote that she was sharing “what we know so far” in her own note. That gave the impression to some employees that the freeze was sudden and that the strategy for counting employees was still developing.
All of this, coupled with Facebook’s recent hiring spree and the company’s continuing decline in market value, has several employees bracing for layoffs. The social media giant increased the number of employees by 60% from the end of 2019 to 2021, according to an Insider analysis of regulatory filings. Since mid-November, the stock has plunged more than 40%.
“The ‘hiring freeze’ is likely to only stem the tide of new hire spending growth as they figure out priorities,” one of the employees said. The other two current employees expressed similar concerns, although they noted that the company has not said anything about the possibility of layoffs so far. People who spoke to Insider asked not to be identified discussing sensitive topics.
A spokesperson for Facebook, now called Meta, referred Insider to a statement given last week about the hiring freeze: “We regularly reassess our talent pipeline based on our business needs and in light of spending guidance given for this period.” are slowing their growth accordingly. However, we will continue to increase our workforce to ensure we focus on long-term impact.”
No layoff plans ‘at this time’
The spokesman declined to comment further, but the company told the Wall Street Journal last week that it has no plans for layoffs “at this time.”
Facebook is still very profitable, but spending has increased and growth has slowed, worrying investors. A hiring rush in what was a very competitive tech job market has cost the company. It’s also spending billions of dollars to create the metaverse, an immersive digital world that will take at least a decade to come into being.
A manager-level employee who recently left the company said Facebook often reorganizes at the team level, sometimes eliminating roles. More actions like this are possible, even in the 1,000-person range, but this person said a larger layoff, something like a 10% reduction in its workforce, is “highly unlikely.”
Another current employee agreed, citing how cash-rich Facebook is. This person sees new efforts to reduce spending, such as hiring freezes and spending cuts at Facebook’s Reality Labs division, which is responsible for metaverse projects, as a good sign.
However, an adviser to major tech companies said he wouldn’t be surprised if Facebook went down the path of layoffs in the coming months. Even the most historically successful and seemingly untouchable companies are unlikely to remain immune to the current downturn. And when companies enact layoffs, “they want it to have an impact,” he said, typically looking in the range of a 7% to 10% downsizing, also known as RIF.
“You don’t want to undermine and then have to do it again,” the adviser said.
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