Facebook parent Meta gives thousands of workers subpar reviews

Facebook parent Meta Platforms Inc. gave thousands of employees subpar ratings in a recently concluded round of performance reviews, a signal that more job cuts may be on the way, people familiar with the matter said.

The company also cut a bonus metric, the people said, one of several steps senior executives are taking after Chief Executive Mark Zuckerberg declared 2023 would be a "year of efficiency." 

Meta’s leadership expects the ratings to lead more employees to leave in the coming weeks, the people said. The company will consider another round of layoffs if not enough depart, the people said. About 11,000 workers, or about 13% of employees at the company, were recently laid off.

Meta managers gave approximately 10% of employees ratings indicating they are underperforming, the people said. That proportion wasn’t unprecedented in the years before the pandemic. But Meta’s employee count nearly doubled from 2019 to 2022, to 86,400, and about half its workers had never experienced a typical performance-review cycle at the company, several people familiar with the matter said.

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"We’ve always had a goal-based culture of high performance, and our review process is intended to incentivize long-term thinking and high-quality work, while helping employees get actionable feedback," a Meta spokesman said.

The recently wrapped performance reviews were seen as a return to form for Mr. Zuckerberg, who before the pandemic had developed a reputation for delivering direct feedback to workers, people familiar with the process said.

One former worker described the process as a return to "OG Mark" or "old school Zuck."

"We’re working on flattening our org structure and removing some layers of middle management to make decisions faster as well as deploying AI tools to help our engineers be more productive," Mr. Zuckerberg told investors earlier this month.

Meta managers gave approximately 10% of employees a rating of "meets most," people familiar with the matter said. There are five possible ratings at Meta, and "meets most" is the second lowest. The lowest—"meets some"—is rare, the people said. Workers who receive two "meets most" ratings in a row are placed on performance improvement plans, and those who receive ratings lower than that are automatically placed on an improvement plan, some of the people said. 

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Within Meta, some employees take such a rating as a sign to look for new work opportunities, these people said.

In conjunction with the performance reviews, Meta informed employees that one component of employee bonuses—the company’s performance—would be paid out at 85% of its target, according to people familiar with Meta’s pay.

Ticker	Security	Last	Change	Change %
META	META PLATFORMS INC.	560.68	-6.48	-1.14%

That figure is one of three used to determine each employee’s annual bonus. At 85%, it is down at least 15 percentage points from the prior year, and below 100% for the first time since the first half of 2018, according to people familiar with past bonus figures. The only other time the companywide multiplier has dropped that low was in the first half of 2012, the people said. 

The company has struggled over the past year and a half, encountering growing competition from upstart Chinese rival TikTok and a decline in advertising demand amid a difficult macroeconomic climate. The company’s prospects have begun to look up since it placed an emphasis on artificial-intelligence technologies in 2022 to improve its ads-targeting and content-recommendation tools.

Since April 2021, Meta has contended with the effects of Apple Inc.’s ad-tracking changes, which the social-media company said last year would cost it roughly $10 billion in revenue in 2022. Over the past three quarters, Meta has recorded year-over-year revenue declines.

Ticker	Security	Last	Change	Change %
AAPL	APPLE INC.	222.01	-0.90	-0.40%

Marne Levine, the company’s chief business officer during that period, on Monday said that she will be stepping down from the role later this month and leaving the company this summer.

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Meta responded to its challenging financial situation in November when it announced the layoffs. It also tightened its belt by reducing office space, moving to desk-sharing for some workers and extending a hiring freeze through the first quarter of 2023. 

The changes have begun to make an impact. Despite a continuing revenue decline, Meta this month reported a net profit of $4.7 billion for the fourth quarter, up from the prior quarter. That snapped a streak of three quarters in which profit had retreated from the preceding quarter—a slump unlike any the company had experienced in a decade.