After two massive layoff rounds, Meta now lowers staff bonuses
Meta terminated the services of 10,000 employees earlier this month. Now, Facebook's parent company has decided to reduce bonus payouts to certain staff and conduct employee performance assessments more frequently. The bonus multiplier rate for the affected workers will be slashed from 85% to 65%. The firm claims that the changes have no connection with the restructuring of the workforce.
Why does this story matter?
- Meta conducted layoffs in November 2022 and March this year, wherein thousands of employees lost their jobs. The firm is now focusing on reducing bonuses in line with its goal of making 2023 the "Year of Efficiency."
- The company has decided to take a hardline approach to reduce costs anyhow. Firms like Amazon, IBM, and Microsoft have also taken similar steps.
How will the bonus cuts be decided?
As per an internal memo of the firm, workers who will be rated as "met most expectations" in their 2023 year-end reviews will get a "restricted stock award" and a smaller percentage of the bonus (65%) in March 2024. To note, the social media giant lets go of staff, if they are rated as low performers in two consecutive review periods.
What will the performance reviews be like?
Meta says the performance reviews will be held twice a year. It believes this will aid in providing "a calibrated performance signal for fairness." The assessments will commence in June next year and shall be finished the following month. The reviews will involve a three-point grading system that will be used to classify employees as performing significantly above expectations, at/above expectations, and below expectations.
'Performance reviews will create high-performance culture'
"We understand that while this is a significant change that might disappoint some people, it aligns with our continued focus on maintaining a high-performance culture," Meta said in the memo to the employees. The company also wrote that "these updates reflect changes we're making based on what we learned about the process in 2022" and what it is "optimizing for in the year ahead."
Meta is also shutting some projects to lower costs
In a bid to cut down on expenses, Meta is shuttering projects, cutting travel expenses, and reducing office spaces. This is in addition to the multiple rounds of layoffs, wherein thousands have been let go. The firm aims to reduce $5 billion in expenses.
