Mark Zuckerberg explains why tech companies are doing layoffs right now

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Mark Zuckerberg explains why tech companies are doing layoffs right now
Credit- Facebook CEO Mark Zuckerberg gives keynote speech at Facebook Developer F8 Conference (Courtsey- Youtube)

Meta’s CEO says companies hired too many employees and then realized that they could do better with fewer employees.

  • Mark Zuckerberg said that a number of reasons have caused tech cuts since the pandemic.
  • A correction caused the initial wave in course from the pandemic era growth and hiring.

Mark Zuckerberg has a theory to explain why layoffs in the tech industry aren’t slowing down. Businesses are starting to realize that, despite being uncomfortable, there are some benefits of becoming “leaner.”

In an interview on Morning Brew Daily’s show, which was released on Friday, the Meta CEO noted that companies are still struggling to adjust to the post-pandemic world. He also talked about the competition from Apple and other issues in a broader interview.

The first wave

In the midst of the pandemic, online sales were on the rise, which led to huge increases in online ads. However, when shoppers returned to the stores and the economy improved to the recession, sales declined, and ad prices returned to normal. Many companies, like Meta, discovered that they were overtired and needed to cut their staff in major chunks.

It was the very first wave of layoffs.

“In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate Covid,” Zuckerberg stated in the interview when questioned whether layoffs at tech had anything to do with the AI boom.

What happens next

Zuckerberg declared that businesses have stopped reducing the size of their workforce simply because they’re overhiring. Instead, they’re realizing that there are advantages to being leaner.

Although a majority of tech companies were hesitant to cut their budgets at first, they came to realize that it was not the end of the road, Zuckerberg said.

“It was obviously really tough; we parted with a lot of talented people we cared about,” Zuckerberg started during the conversation, referring specifically to the past layoffs at Meta. “But in some ways, actually becoming leaner kind of makes the company more effective.”

Since Meta has cut tens and thousands of its employees starting in Zuckerberg’s “year of efficiency,” Meta has been making an impressive comeback. She is now trading at its highest level in history.

Fewer management layers

Zuckerberg has been cutting down the management levels as part of this effort to improve efficiency. Instagram is cutting out technical program managers, and that job is being reduced across other areas of Meta.

Present day companies are looking at ways to think about efficiency. Zuckerberg declared during the Morning Brew show. Many are looking at reforming the business, reducing the management structure and transforming to a smaller model.

Companies such as Microsoft or Google have remained in the process of reducing their size despite their impressive results. Some CEOs from companies such as Amazon have announced plans to streamline the business as well as invest money in new areas utilizing AI.

However, Zuckerberg declared that he didn’t believe that AI was an integral element of the factor.

“At least for us, the AI stuff was not a major driver for that,” the CEO stated. “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.”

Apple competition

Zuck also addressed Meta’s fierce conflict with Apple. Zuck and Apple chief executive Tim Cook have something of rivalry that goes back several years. Both companies are racing to become the most dominant platform for virtual real-world, augmented reality and what Apple calls spatial computing.

In the past month, Zuck was a critic of earlier this week, Zuck panned Apple’s Vision Pro goggles in an article published on the internet.

“I take Apple seriously,” He said on”The Morning Brew podcast. “I think it’s like a good company. They do good work.”

Zuck stated that Apple is likely to upgrade its headset; however, Meta is likely to be able to move faster.

He also reflected on the development of computers and pointed out that sometimes closed platforms, like Apple’s iOS, were able to win.

“But that’s not always how it works,” Zuck explained, pointing out that Microsoft’s approach to personal computers gained traction in the early 1990s.

“I just don’t think that the future is written on this yet,” He declared.

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