Mark Zuckerberg, the CEO of Meta, recently discussed and opened up about the recent and ongoing trend of layoffs all around not only in Meta but also in the whole tech industry during an interview with the Morning Brew Daily podcast. According to Zuckerberg, the persisting and frustrating layoffs are a result of companies still grappling with the aftermath of the pandemic and recalibrating their workforce needs.
He explained that the initial rush in the e-commerce sector that took place during the pandemic where there was a lot of sudden unemployment prompted companies to increase their hiring and invest heavily in online advertising.
However, as the economy stabilized gradually and consumer behavior shifted back towards physical stores, companies realized they had over-hired and needed to trim their workforce to align with new realities.
“In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate COVID and the pandemic,” he said.
“It was this weird wave, where at first we saw ecommerce go through the roof,” he added. “But it was really hard to predict – is that going to continue? is all this e-commerce just better than physical shopping?
“I think across the economy, a lot of companies overbuilt, and then when things went back to pretty close to exactly the way they were before. I think a lot of companies realized they were not in a good financial place.
“So you have this wave of layoffs that were basically responding to that, but then you also had this generation of companies that knew nothing except growth.”
Zuckerberg has emphasized that these layoffs were and will primarily be a response to the challenges posed by the pandemic rather than being driven by advancements in artificial intelligence (AI). While the decision to downsize was undoubtedly difficult, Zuckerberg suggested that it ultimately contributed to making companies more agile and effective in the long run.
“For us, the AI stuff was not a major driver for that,” he said. “It was like first this overbuilding and then this sense of like let’s do the best work we can by making a lean company.”
Meta itself underwent significant workforce reductions, starting from what Zuckerberg termed as his “year of efficiency.” This initiative resulted in tens of thousands of job cuts within the company, leading to a subsequent resurgence in Meta’s stock value. As part of this efficiency drive, Zuckerberg has been focusing on streamlining management layers within Meta, with initiatives like reducing technical program manager roles across platforms like Instagram.
The trend of layoffs extends beyond Meta, with other tech giants like Microsoft and Google also implementing workforce reductions despite posting solid earnings. While some CEOs have highlighted plans to invest in AI and restructuring, Zuckerberg indicated that AI was not a major factor driving Meta’s layoffs.
In addition to discussing the internal dynamics of Meta, Zuckerberg touched upon the company’s rivalry with Apple, particularly in the domain of virtual and augmented reality. Despite acknowledging Apple as a formidable competitor, Zuckerberg expressed confidence in Meta’s ability to innovate and move faster.
Reflecting on the history of computing platforms, Zuckerberg noted the success of both closed platforms like Apple’s iOS and open platforms like Microsoft’s approach to personal computers in the past. He suggested that the future of computing platforms remains uncertain, but Meta is well-positioned to compete and innovate in this evolving landscape.