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> He does have a fiduciary responsibility to shareholders, even if that means making difficult staffing decisions

I feel like people over-index on the idea of "fiduciary responsibility to shareholders." I don't think most decisions a CEO makes are really done with shareholders specifically in mind. They do what is best for the company --for its health, growth, and sometimes survival-- and shareholders are just there for the ride. Certainly, there are some executive decisions where shareholders are the primary factors, but by and large I think they're an afterthought at best.

He over-hired, he lost faith in the direction of a big chunk of Meta's initiatives, and he now wants to pare back.

Honestly I agree, I think "fiduciary responsibility to shareholders" is kind of a funny phrase to be honest. I don't really believe most CEOs at an individual level think of shareholders much except that stock price up means good, and stock price down means bad, and sometimes they complain and we have to justify our actions and respond politely for reasons.

To me the phrase almost is a moral shorthand for capitalism. A corporation has no inherent right to life or survival instinct the way a person does, and the phrasing and pretense of "duty to shareholders" is used to give it one by proxy. Does that make sense? So rephrasing my original post, it would be something like "We all agree it's moral to seek profit, since that's the economic system that seems to work, and his actions can be seen as in line with that, so therefore if you agree capitalism makes sense, his actions are justifiable and moral".

I don't think it's even that, per se. Even putting aside profit (which possibly the CEO of Facebook can never do), it still seems like this is a straightforward case of "We think we have too many people." Profit notwithstanding, what do you do if you realize a giant chunk of your workforce is not needed?

> what do you do if you realize a giant chunk of your workforce is not needed?

It’s not like the workforce just appeared out of nowhere. They were hired by the same management who is now firing them.

Ultimately society has to choose where it wants to be on the spectrum between difficult to hire and difficult to fire, and easy to hire and easy to fire (workers can also unionize to push things further towards the “difficult” end).

And what's your opinion then?

Teams and individual were hired for projects and roles that management doesn't now think will work. Keep everyone on-board indefinitely? Doing... what, exactly?

1 year's severance should be mandatory. And 1 year of identical healthcare coverage for free.

It's a failure of management in any case. Just like returning cash via excessive dividends, it's an admission that the current management doesn't have the imagination required to use the assets at hand in a profitable way.

So many of the large companies today are one trick ponies trying to milk their singular profit center to the nth degree instead of diversifying into new niches.

Meta failed spectacularly in the direction they did try- but ultimately, like Google, even that (VR) was a way to expand their advertising business, rather than truly expand their footprint.

Apple seems the singular Silicon Valley company truly able to find new niches and expand their competencies. I do wish they'd stuck with Jobs original obstinate insistence of not paying dividends- it was a forcing function to keep them actively investing that cash into new ventures.

Fiduciary duty to shareholders doesn't mean you have to make a profit. You have to do whatever your shareholders want, and they don't have to want profit.

Shareholders are the people who own the company. The company is collectively their property.

The officers of a company (CEO, etc) are caretakers of that property on behalf of the shareholders.

If you own a Pizza Hut, and you hire someone to manage and run the store, their job is to make sure the store (and thus you) make a profit. The CEO has the same obligation to shareholders.

Fiduciary responsibility also gives company execs a very wide berth. A ceo is more likely to be fired by the board than run afoul of their fiduciary responsibility.

Let's also not forget that Zuck has more than 50% of the votes, even while owning less than half the stock. He's accountable to literally no one.

I'm really tired of this mental virus that's taken over bad CEOs, the imaginary responsibility to shareholders:

https://en.wikipedia.org/wiki/Friedman_doctrine

It was actually cooked up in the 70s by Milton Friedman, and over the ensuing few decades it's gone so viral that even its opponents think it's true.

Companies have a responsibility not to just annihilate the shareholders' money for no reason whatsoever, but they have a LOT of leeway to make risky investments or go off on tangents. Executives are NOT legally or morally required to screw people over for an extra short-term buck.

> NOT legally or morally required to screw people over for an extra short-term buck

I saw nothing in the Friedman doctrine that says anything about prioritizing short term results.

But if the company doesn't do what the shareholders want, the shareholders sell, and the stock price goes down.

Friedman had a very mystical conception of the market - viewing almost as a collective intelligence - and would say in this case that its judgment of the company strategy was correct.

I haven't seen any evidence that Friedman advocated short term profits over long term results.

His view would be that if the stock price went up as a result of some action then that action would be the right one (its orthogonal to the point about short term profits).

Agreed, this is the definition of short term profits

> this is the definition of short term profits

That's not remotely true. Stock prices are based on long term fiscal results. If shareholders get a whiff of a company sacrificing long term results for short term profits, the share price tanks.

Yeah, but even here you have people parroting this line about "responsibility to shareholders to maximize profits" which is blatantly untrue. You're free to be a sociopathic monster within the limits of the law, but you aren't REQUIRED to.

If you entrust your money to someone else to invest for you, what are you expecting?

It's more about 10-Q reports than any particular philosophy. Quarterly earnings is a big deal universally for public companies.

Agreed on over-indexing on "fiduciary responsibility to shareholders," and I'll go a step further.

Founders generally do what's best for the company (or try to). There are enough infamous CEOs that clearly did what's best for themselves.

CEOs do what's best for themselves and I'm reasonably sure people with low empathy (to put it politely) are over represented among CEOs.

While I think this is true in Zuckerberg's case, he's more concerned with his legacy than his net worth.

Just a counter-point to this, throughout my career I’ve worked closely with many CEOs who I would consider high empathy. Now I would say most often what was best for the company was also best for them personally so those outcomes were fairly well aligned.

Meta revenue growth has now stalled. It's in the interest of shareholders to invest in new revenue streams, which requires people. Paring down staff is the death spiral for tech companies.

Zuckerberg can try to hoard cash to acquire the next Instagram or YouTube, but I don't think it's going to work; it's risky. That's not what Apple did. It's not what Microsoft did.

The bar for fiduciary misconduct is pretty high. Even $10 billion on the metaverse didn't come close to it because management could say with a straight face they believe it's the future.

If FB/Meta was really hurting due to those "overall economic pressures" then sure, tough times, tough choices. But what is that "fiduciary responsibility to shareholders" when the company is enormously profitable and Zuckerberg himself owns a majority of the voting shares and $50b+ of the equity?

Companies will claw back your signing bonus if you quit within the first year. It seems eminently reasonable to me that a profitable company should be legally liable to pay you at least your signing bonus, if not full severance or even your first year's salary, if they pull your offer right before the start date. That $x00k doesn't matter one whit to $META but it will very likely be a source of existential crisis for the family who planned their lives around it.

> [...] Zuckerberg himself owns a majority of the voting shares and $50b+ of the equity?

That doesn't make too much of a difference. If anything, it makes his duty to the rest of the shareholders more important. (In a legal sense.)

> It seems eminently reasonable to me that a profitable company should be legally liable to pay you at least your signing bonus, if not full severance or even your first year's salary, if they pull your offer right before the start date.

You are free to negotiate for such a clause in your contract. And to refuse contracts that don't have this clause.

> You are free to negotiate for such a clause in your contract. And to refuse contracts that don't have this clause.

You seem to have missed the post you’re responding to’s point, since it’s making the exact point that you can’t do this; due to power disparity.

They will coerce you into mostly unenforceable non-competes and 2yr window signing bonus stipulations to scare tactic you into being a “loyal” cog, but will do nothing if you sign a contract, move half way across the country, change your entire livelihood and then decide to pull your employment offer at the last moment. And you can’t do a damn thing about it, unless you’re a .1% top engineer. That’s literally the definition of a power imbalance.

Pick companies with a better reputation, then.

Pick a better hill to die on, you’re alone.

People take companies' reputation into account all the time to decide between offers.

And yet, their reputation doesn't matter given the fact that near all of them are currently laying off massive numbers of their employees. I'm glad there are 5-100 person startups with amazing reputations, unfortunately, the vast majority of tech workers will not be able to funnel into those. It's the most basic of economics and logistics.

If you want to stubbornly die on your lonely hill go for it. I'm not interested in further conversation with you, sorry.

His responses show he doesn't have any understanding of what he's doing to people and their families. If humans were robots who didn't need shelter, food, and care, okay I guess. I may get laid off. If so, I'll go to sleep until I'm needed again. That's not how people work. Nobody wants a job with a constant threat of being laid off during the absolute worst economic times, when finding a job is hard and if you're honest with potential employers about being laid off, you'll have an automatic negative stigma attached to you.

If staff reductions are necessary, there are ways to do them within a reasonable amount of time without seriously hurting people and traumatizing everyone who's left at the company. Layoffs are bad for morale, bad for business.

Or you could look at employees like sheep or cattle to be herded and culled when it suits and when asked for justification, make completely tone deaf answers that show no compassion for the human costs of your actions, the actual points of the questions. See if your best people are still loyal and decide to stick around.

Those employees work at a company that treats its users like sheep. How can they expect to be treated differently?

A lot of people think they're a wolf in sheep's clothing, when in fact it's the other way around.

> His responses show he doesn't have any understanding of what he's doing to people and their families. If humans were robots who didn't need shelter, food, and care, okay I guess.

Anyone surprised that Zuckerberg seems devoid of empathy? The laid off people can live in the Metaverse until times get good again, right?

> His responses show he doesn't have any understanding of what he's doing to people and their families.

Sheryl was the one heading up the empathy department.

> Legal? Yes. Justifiable? No doubt. Morally? It's grey.

Sustainable? I doubt it. Rescinding signed offers before people start is a very bad practice. If that's the trend, and they ever ask me to work for Meta, I'll want a clause like "we won't lay you off before 6 months". I'm totally ok if I don't pass probation, or if some shit happens when I'm there, but not even starting (so I cannot put "Meta" on my resume and I don't get severance) is just as if the offer was never signed.

> I don't think Mark's answers are necessarily unfair either, he's running a business after all. He does have a fiduciary responsibility to shareholders, even if that means making difficult staffing decisions (still true even if they were his fault to begin with by over-hiring). Ultimately you agree to participate in this framework by accepting a job at a public company.

The problem is, these companies haven’t been hiring to their needs. Instead they have been competitively hiring to A) try to ensure they have the best talent and B) to overinflate their engineering trajectory as a means to pad their corporate value.

This is 100% the fault of the industry and not the employees and they should be held accountable. They’ve impacted near 100k people’s livelihoods with their self-interested and idiotic business moves. So I’m not interested in their fluff answers or “fiduciary duty”.

Morally? Unless you uncover something fraudulent in the candidate's application, it's downright amoral, not grey at all.

"Justifiable? No doubt. Morally? It's grey."

WTF? It is absolutely NOT justifiable and very much morally despicable to pull a job offer after the person has already quit their other job.

Companies are responsible for a group of shareholders with the majority voting right. Typically it is only a few shareholders as the ownership distribution follows a power law.

So a company is responsible to those few owners and that is it.

For example, Mark is the biggest shareholder in Meta with 16.8% of shares in 2021. Together with 2 other biggest shareholders they own over 30% of the company.

Company management has fiduciary duties to all shareholders, not just the majority.

In theory yes, but in practical terms taking care of board members and few remaining big shareholders is enough.

'In practical terms', the other shareholders can still sue you.

It seems to me that this is extremely unlikely to be true under corporate law. Do you have a reference? In particular, there is no unique group or shareholders that makes the majority!

Even if the law or corporate statute requires that owners of, say, 10% of shares should be able to raise the concern or even block big decisions like a sale of the company, in practice the ownership is very uneven. Just 10% of owners can own 90% of shares.

For less drastic decisions where holders of 50%+1 or 2/3 of shares is enough agreement of board members and few more shareholders is often enough.

And even with less skewed share distribution views of shareholders are very broad and the board does not have troubles to form the necessary majority.

Surely shareholders coups are possible, but those are rare.

Of all CEOs, Zuckerberg has the least to worry about in terms of his (imaginary) fiduciary duty to shareholders. The board and shareholders can’t fire him.

Stop internalizing corporate platitudes. The sooner you accept that the game is making money the sooner you can get yours and stop expecting your employer to owe you anything more than a paycheck for your work.

IMO this is pretty much how all of tech is starting to feel. Not good.

The core issue with capitalism in the US is that equity holders are considered to be more important that labor. This logic is used to justify massive layoffs like this, but why can't employees be treated at least as importantly as shareholders? After all they are the people who actually generate the wealth for the shareholders.