Meta delays setting team budgets as Facebook parent plans fresh round of layoffs | Hacker News Reader

Meta delays setting team budgets as Facebook parent plans fresh round of layoffs

reuters.com

101 pointsdjkivi77 comments

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We always used to joke that layoffs always come in threes.

The first one never cuts deep enough. People do the bare minimum.

The second one comes when everyone realises that the business actually is in trouble and does need saving.

The third one is needed as the business has been so badly damaged by the layoffs and is now bleeding cash.

Often true but Facebook is not bleeding cash though. They are printing money. They are just very bloated.

Isn’t Facebook the company of $300k-a-year developers? These jobs practically didn’t exist before Facebook-Google.

Are we in a situation where we might see the previous normal come back, ie $150k when you’re a manager slaving away and that’s it?

It's actually really difficult to run a business that is hugely profitable and to keep wages under control. This is less of a "Facebook" thing and more of a "highly profitable company" thing.

The reason wages at FAANG are high is because they make a shit tonne of money, and since they've got that much money they can just pay top engineers more than competitors. There's a limit to that - which is how much money are they making.

But if Meta decide they're just going to pay everyone less, what happens? Everyone leaves and goes to Google. What happens if Google decides to pay less? They go off to Microsoft or Amazon. So they can all afford these high salaries - because the company makes a tonne of money, and they have a clear downside to not paying these salaries- they lose top talent.

The cases where other companies are paying less are entirely down to actual hardnosed business, they pay less because they expect to hire less good people and that's a good trade off in a business that isn't reliant on engineering talent. Intel coasted for about a decade not competing for the best talent, why? Because their sales strategy was what dominated the profitability of the company. Eventually they lost their engineering edge and now the company is in the toilet, but that wasn't really a mistake, it was a deliberate choice by management to control costs rather than invest to innovate.

“Everyone leaves and goes to Google. What happens if Google decides to pay less? They go off to Microsoft or Amazon.”

Problem is that Google, Amazon and Microsoft aren’t hiring right now.

They are if you are good enough.

Of course, but why work for someone else, especially a huge corp, if your good enough?

It's more difficult than it was, but it's not impossible, and the second you drop down into the second tier of pay - as the GP was suggesting, suddenly you've got thousands of companys that you could be going to.

A company that multi-billion profit on top of multi billion stock buyback cannot be "bloated" by any definition of the word that's not uttered by a sociopath.

https://drthad.substack.com/p/the-stupidity-of-stock-buyback...

They've just announced $40B stock buyback. This is purely sociopathic decision.

Sociopathic? Are the laid off $300k/y developpers going to struggle getting food on their plates?

Probably not, but they might have to go back to ramen.

Perhaps if they have a million plus mortgage on their house in SF, a couple car loans, a new health insurance payment, cash flowing a kid in college or private school, child support / alimony payments, vacation home, etc.

Roughly 30% of the Americans earning > 250k / year are living Paycheck to Paycheck.

Of course one can hope that having to rely on food stamps/charity after earning multiples of the median income will improve people ability to budget, but I somehow doubt that will be the case in a country revolving around credits cards being the main payment method.

It's technically "paycheck to paycheck", but it's on a different level than "if my paycheck is a week late, I don't eat or my electricity is shut off or I'm going to be evicted". It's cash-flow optimized leveraged wealth.

Last time that claim was made, the stock part of compensation was not included.

Of course, people have this habit of spending every dollar they earn and more, no matter how much they earn. But I struggle to see the tragedy in them having to downsize their life as a result of their overhired job getting cut and even less to pity them if they didn't build some nest egg with those salaries. It's not like Meta employees are some bottom shelf developpers anyway, they'll find more work I'm not scared for them.

> Sociopathic? Are the laid off $300k/y developpers going to struggle getting food on their plates?

Laid off people (of any profession) are making $0/year.

If company thought it's excessive they could not hire them. If company could not afford them, they would not do stock buyback. Non-performance related layoffs should be a decision that comes with heavy corporate penalties, such as ban of dividends or buybacks for a number of years.

And the corollary of this is how to do layoffs right (allegedly Toyota does this):

1. Cut out whatever else you can first, like executive bonuses and salaries.

2. Calculate the bare minimum staff you need, through good times and bad times.

3. Lay off the rest.

4. Tell those that got stuck behind that it was an extraordinary event and that they have tenure for life should they want it.

5. Stick to your promise.

Wouldn’t that lead to a roughly 75% staff reduction for some of these companies ? Just like what happened at Twitter.

Would be fun to witness the aftermath on programmer salaries after this.

might take a while to adjust given how generous and long lasting recent severance packages have been.

I bet we'll see less impact on base pay and more impact on equity comp. Cautious engineers will get burned by unrealized comp (unvested shares) and insist on a distribution favoring base pay. I expect this will flatten engineer pay across the industry, because the big outliers in total comp were outliers because of stocks.

I think there are simpler effects at work here, like less competition and optimistic calculations of the expected future value of grants.

Assuming management who actually care about their people (a tiny minority), I've seen companies allow employees to vote whether the company should have layoffs or temporarily reduce everyone's salaries by various means (e.g. furloughs). This approach requires some things that are rare, like competent senior management who care about the well being of their people.

I wonder if all of these layoffs have to do with this tax change: https://beenegarter.com/rd-expense-capitalization-remains-ap...

Software engineering as an R&D expense can no longer be used in the same year, or has to be deprecated. If companies are trying to look profitable compared to bonanza years, they can’t be paying a bunch more to the government for extra engineers hired when the rule was still in place.

Doubtful. Aren't companies judged on EBITDA?

Sometimes, by some people, for some purposes.

Buffett and Munger have been notably skeptical of its usefulness for a long time:

https://www.cnbc.com/2020/02/12/charlie-munger-warns-there-a...

https://finance.yahoo.com/news/charlie-munger-warren-buffett...

https://seekingalpha.com/article/4326833-earnings-lies-and-w...

I think it’s certainly a possibility. And the reality of this has been quite the discussion point during our small company’s tax and budget planning.

The tinfoil hat side of me wonders if this was done to possibly provide cover / a reason to do the layoffs. Someone lobbied for this. Congress had bipartisan support for extending the R&D carveouts for software development last session. Yet they didn’t. Why not?

They probably just ran out of time in the lame duck session… but still, why not go for a bipartisan win? Perhaps could be that tech companies are the ones legislators are comfortable sacrificing at the moment, although it seems they’d want to attack the big tech giants and not impact every company doing software development. I don’t get it.

> why not go for a bipartisan win?

And then not trumpet it to the skies? It reads to me more like a screwup owing to excessive partisanship, and that seems borne out in https://www.forbes.com/sites/lynnmucenskikeck/2022/11/22/wil...

Not too surprising more lay offs are coming.

I joined Facebook in 2017 and they had around 40k people (left in 2020). By 2022 they had 80k.

I met with my first manager (he’s a director now) at FB a few weeks after the lay offs were announced and even he was totally puzzled as to why Meta hired so many people. In his own words, he couldn’t see what all those extra people were doing.

I do wonder if that number of employees is just inflated due to Meta acquiring a bunch of companies (VR)

Same with many other well funded unicorns and scale-ups where my friends got hired in the hiring spree from 2020 - 2022, especially in the crypto and stock space.

They hired too fast and the new hires didn't have the chance to get ramped up to speed at all so most of the heavy lifting was still done by those with longer tenure in the company who knew the systems well but were too busy to keep it running and sprinting on adding new features to have time to bring the new hires up to speed, so the new hires were idling for moths doing nothing while collecting golden paychecks.

Probably now the companies realized they overhired, for an economic future that didn't pan out, and are now correcting this as they can still run profitably with the workforce they had before the mass hiring spree which brought them no benefits.

Problem with these layoffs are tho that they will affect long tenured folk as well as newish hires. Dumb decision after dumb decision.

As someone else here said it, and as I've learned from my friends in management, layoffs aren't purely random. They're letting go of the people who's compensation is higher than the value the company perceived the employee adds or fails to add to the company relative to their compensation.

If you've negociated an amazing compensation at the hight of the hiring boom aka the great resignation, when the market was red hot, but your performance reviews aren't stellar, chances are you're on your way out.

But if you haven't negociated a high raise in the last few years and you're getting great performance reviews, chances are you're staying.

It's relatively clear cut. No company is letting go of people who do great work at market rate. They're letting go of people they perceive to be underperforming relative to their above market rate wages. It's that simple.

We can go into semantics that your performance review in most cases never accurately reflects the value you add or don't add to the company, but this has always been like that, especially in the large companies where the big layoffs are happening. You're always at the mercy of your manager giving you great reviews.

Many top performers leave after layoffs. They know they can easily get work elsewhere and don't want to deal with the post-layoff chaos or job uncertainty.

There are also many forces pulling them away from the company - headhunter pressure increases after layoffs, their fired friends are going to a set of companies (or starting their own) and asking them to come over, and the cynicism that spreads in companies after mass layoffs (where some people are always laid off unjustly, some promising projects are often spun down indiscriminately, some critical areas of code almost always become unmaintainable post layoffs, etc).

Layoffs never just get rid of the targeted people. They usually get rid of employee morale and top performers, too.

I never said layoffs were not unjustly, I said they're not random like people think but target a subset of employees that the company currently flagged as undesirable for whatever flawed metrics each company uses.

>There are also many forces pulling them away from the company - headhunter pressure increases after layoffs, their fired friends are going to a set of companies

If they're so many forces pulling them away form the company like headhunter or colleagues, why are we acting like the layoffs are a tragedy to happen to them? The way you phrased it sounds like a blessing.

The argument is that layoffs tend to incur follow-on decisions to depart being made by people who were not laid off.

I don't necessarily have an opinion about that - I've seen exoduses, but not (yet?) for that reason - but my inbox at least corroborates a sharp increase in the rate of headhunting lately.

The "tragedy of layoffs" is not that the top talent won't find other work. It's more about the people who will be unjustly affected. Those that are let go through no fault of their own, those whose morale and work satisfaction is destroyed, those who were hopeful for and dedicated to projects now being canned, those who will have visa uncertainty, those who have to go through the stress of a job change, and others put in similar circumstances. Top talent is not excluded from this. But they will find work.

> It's more about the people who will be unjustly affected

People are unjustly affected at work on a daily basis everywhere, especially outside of big tech.

Unjustly affected big tech workers will easily find better options elsewhere. I don't get the tear shedding and pandemonium.

Just because something bad happens frequently, it doesn't somehow less bad. If anything, the frequency makes it worse. Also, the Big Tech companies have to hire non-coding positions that will have a lot harder time finding a job than the tech workers. I would expect these non-tech workers got caught up in all of this as well.

> They know they can easily get work elsewhere and don't want to deal with the post-layoff chaos or job uncertainty.

If your current employer is the only one doing layoffs, sure.

But would you feel more secure leaving Facebook to join Netflix or Twitter or Amazon or Uber right now?

No, but those are not the only companies top talent is going to. I can see at least three streams of "top talent migration" after a layoff in my tech company that happened a few years back - other big tech (Fortune 500 and similar companies), start-ups (including own), outside of big tech (gaming, space, medical, civil infrastructure, etc).

A lot of companies are hiring aggressively and don't plan on layoffs. From my anecdotal experience, the FAANG layoffs are a bit of a joke in some CEO circles. A lot of tech does not agree with what FAANG is doing.

That’s a really interesting perspective. How much is point-in-time performance compared with potential-future-performance?

Meta level E3 with a crazy post-college salary looks like a waste of money on paper, but if they are looking like the kind of person who will make Staff Engineer in 24 months you’d want to keep them on board.

Similarly, a Staff Engineer with 4y of tenure, vested out, and killing it feels like a flight risk. Do you go out of your way to retain them, knowing they’ll probably leave soon anyway?

I’m just speculating here. Are there any real patterns like this that you’ve heard of?

>but if they are looking like the kind of person who will make Staff Engineer in 24 months you’d want to keep them on board.

What if, after hiring them, you realize they definitely won't cut it as a staff engineer? Bad hirings slip through all the time. Just because someone can leetcode doesn't automatically mean they'll reach every wild target you throw at them.

The higher up the food chain you go, the more arbitrary and random it becomes. The strategy around these layoffs are typically very poorly conceived and mostly involve cutting to a number across the board, which is random and pants on head stupid. There is typically little or no in depth analysis, which typically ends up cutting muscle or even bone in the company while many area of the company are left fat and bloated. Pretending that you will almost certainly be fine if you're in line with the rest of the herd is the myth that senior management wants you to believe. Certainly, if you make a ton of money and dont deliver value, you are at high risk, but if your department is seriously bloated, you probably stand a similar chance to getting the axe as the Average Joe down the hall who works in a tower that runs a tight ship. When senior leadership tells middle managers to cut a certain amount across the board, which is very common, there is vastly uneven damage across the organization.

> just inflated due to Meta acquiring a bunch of companies (VR)

that might account for ~1500 people. All areas of the company have inflated.

> "Meta did not immediately respond to a Reuters request for comment outside of normal business hours."

Just to air a side gripe, I don't know why journalists and/or editors think statements like this are helpful in the least. Did you ask them 1 hour before your deadline? Was it a week ago?

Are we to gain some better understanding or infer something by your inclusion of this caveat, other than to get a superficial cover-your-ass "we asked them at some vague time we can't be bothered to state, and haven't heard back yet"?

Back to the substantive content, this article can be summarized by the first sentence of it, minus the regurgitated 2/3 of the rest of the story. "We heard someone in some division say their budgets aren't final yet, so we're guessing that more cuts are possible."

It’s a basic courtesy that shows some amount of good faith, and helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it. It’s not necessarily suggestive of much, but it’s respectful and useful for context.

>[It] helps the reader understand the degree to which all parties have had an opportunity to be heard, and whether or not they chose to seize it.

I agree that this would be the case, but only if they were a bit more explicit about the amount of time they gave to the company to respond. Which, I believe, is the entire point the grandparent comment is making.

As the article currently stands, it makes it sound like the company was reached out to, but ended up not responding, which might be indicative of something on their end. Initially, I assumed the typical cowardly corporate "better just ignore and not reply due to the advice from legal" approach and an implied silent admittance of the anonymous info in the article being truthful.

And then I re-read the article after seeing the grandparent comment, and realized that the article author admitted that they only attempted reaching out to the company outside of business hours, likely on a saturday (given that the article sources another article that broke those "news" earlier the same day). That turned my initial impression a full 180, with the only factual takeaway from that article being that Meta employees responsible making official public statements on behalf of the company observe weekends off.

I've seen dozen of examples of journalists sending these with ridiculous timelines (eg sending 10PM Friday night for answer by Saturday), seemingly because they do not care for or do not want your input on the story, but know asking is considered a requirement. If anything, it signals the opposite to me.

> Just to air a side gripe, I don't know why journalists and/or editors think statements like this are helpful in the least. Did you ask them 1 hour before your deadline? Was it a week ago?

I think this is an absolutely fair question. However, the Reuters story came out on Sat and simply cites another publication, which came out the same day. Reuters even said "request for comment outside of normal business hours". I'd say it's pretty clear that all of the following happened within the space of one Saturday: Reuters saw the FT story, pinged Facebook, didn't get an answer, published their own story. Personally, as a reader, I don't feel I'd learn much by having access to a more granular timeline.

Reasonable point, but what makes them have to publish a story on a Saturday, uncorroborated, rather than wait until Monday and get some comment from FB?

Goes to another overall point that, why do they need to get a barest-of-bones story out like this? Is their role simply to convey tidbits of gossip, or actually be act like journalists and investigate what’s true?

I read it as a side note to the reader that this information has not been confirmed by the company yet so it could be false. However they did ask them but did not get an answer. Also that it’s not unreasonable that they did not get an answer. Sounds to me like they are trying to be good journalists but at the same time they want to break the story while it’s hot. So you get a story with a disclaimer that doesn’t put the blame on the company.

They are literally reporting made-up "news" based on their own fantasy (and vaguely admitting doing so) and you feel that's "good journalism"?

Then what is "bad journalism"?

I think you’re confusing giving the company a chance to respond with made-up news. The time a news outlet gives for a response is usually proportional to the severity of what they’re announcing.

Giving a company a chance to respond to some hiring numbers when they likely have multiple anonymous sources who have been credible before is a different bar than asking for comment on something that alleges fraud or illegal activity.

If a company doesn't respond to the made up fantasy, that doesn't suddenly make the made up fantasy any more real or proven.

> The time a news outlet gives for a response is usually proportional to the severity of what they’re announcing.

This is an assumption with 0 substantiation. Actually in 2023, I would say the average main stream media outlet does NOT get the benefit of the doubt here.

> likely have multiple anonymous sources who have been credible before

This is an assumption with 0 substantiation. Again.

Why does this media outlet deserve the benefit of the doubt? I just don't get it.

It’s common journalistic practice. That’s one of the benefits of reporting in mainstream media, they have pretty high standards for what gets published.

That doesn’t mean they’re always right or there aren’t bad journalists, but if you spend time listening to most journalists explain their reporting they often explain exactly how they verify their stories, what they went through to get sources, and what they were and weren’t able to report.

Journalism is one of the few ways we have in a democracy to hold power to account. What I don’t get is what a lack of faith in this institution does for us except give those in power even more ways to be unaccountable for what they do.

There's a lot of buzz from folks who work there about Zuckerberg emphasizing flattening the hierarchy and making job cuts a routine part of operations i.e. much like say IBM or Cisco routinely trim in a way that most of their cuts don't make the news

Job cuts are already part of the culture. There are non-regretful attrition targets and the bottom 10-16% or so each year either need to improve or will get fired.

>The WhatsApp owner had cut more than 11,000 jobs or 13% of its workforce in November, following such tech companies as Amazon.com Inc (AMZN.O) and Microsoft Corp (MSFT.O) which have announced thousands of layoffs due to the economic downturn.

What economic downturn? Certainly none in the US by most metrics.

> What economic downturn?

Someone closed the interest free money faucet

Hard landing? Soft landing? No landing at all more like!

The same kind that fuels 40B buybacks. Sure, inflation is up, but these companies are still wildly profitable. Perhaps they are preparing for winter, but it's not completely here today.

If you repeat a lie often enough it becomes the truth.

On a side note, I was curious to know the design story behind the Meta logo.

Found the page below explaining the branding, and how the logo can be used in motion. But why would they choose to display the animated logo as a 97 megabyte animated GIF? I know times are tough and people need to be laid off, but I suggest retaining at least one person who understands why it's not cool to post a 97 MB GIF of your main logo.

https://design.facebook.com/stories/designing-our-new-compan...

If you're talking about the first gif on that page[1], it's only 1.6 MB

[1]: At the time of checking: https://scontent.fyvr5-1.fna.fbcdn.net/v/t39.8562-6/24881465...

Funny how you stopped checking after the first gif....didn't scroll any further?!

I'm talking about the second gif on the page. The big one. The 90+ meg one!

Admittedly, I did get bored reading about Meta's branding

Pretty funny to me that in the article it speaks about “the WhatsApp owner” almost as if there are now enough people who might not really know Facebook anymore…

Layoffs should be done once.

Meta's stock is up over 40% this year.

Mind fleshing out how you think that relates to this article? One is left guessing at what you mean.

Stock prices reflect a prediction about future profitability or company value, not how nice the company is. The stock going up shows that people who invest in Meta think layoffs will increase profits. That's all.

So are Tesla, Nvidia, Uber, Shopify, Cloudflare, Spotify, Roku, Zillow, and Coinbase to name a few. It’s almost like nearly all tech stocks have bounced.

Because investors are expecting the Fed to cut rates this year, which benefits growth stocks much more than value stocks, since future cash flows are discounted by less. If the expected rate cuts don't materialize, this group of stocks is likely to crash hard again.

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