Meta is showing SMEs how not to prepare for a recession

Like many people, I had doubts about the metaverse when it was christened in 2021. Every discussion about this strange new, online world felt like it should bring Sarah Connor bursting through the doors and screaming about the dangers of Skynet.

Sarah may not have seen this bit coming, though. At the end of last year, Meta – the company formerly known as Facebook, and supposed champion of the coming metaverse – announced it would be laying off 13% of its workforce. In total, 11,000 people were left without jobs. 

Those still standing were told last week to up their game: company leaders have reportedly declared that any staff member who receives a “meets all expectations” grade in their appraisal will in fact be considered as underperforming.

Tech-sceptics like me can rejoice! It seems the metaverse isn’t a strange new invention after all, but a time-jump back to the good old days of the 1980s – an era when workers were treated like disposable commodities and greed was good.

Meta is not alone in making redundancies. Facing a global recession, many companies (particularly in tech) have been forced to streamline operations and prioritise survival over growth. Amazon’s first ever UK strike was, in part, triggered by the announcement of three of its warehouses closing, which would end some 1,200 jobs.

Yet Meta’s recent, callous messaging normalises a dangerous new rhetoric; one also advocated by newly-crowned Twitter CEO, Elon Musk. 

Last November, Musk issued an ultimatum: staff could either commit to working “extremely hardcore” hours, or else leave the company with three months’ severance pay. (Unsurprisingly, most did the latter.) Meta CEO Mark Zuckerberg is effectively treading the same path as Musk, in telling staff to put in 120% or pack their boxes. 

Outwardly, the new strategy for these supposedly forward-thinking Silicon Valley giants seems to be nothing more astute than ‘let’s cut off our nose to spite our face.’

The requirement of unfaltering commitment and dedication from the world’s most successful businesses, threatened only by termination should they fail to comply, is not just inefficient – it lacks heart.

Yes, organisations need to increase productivity to be fully cost-efficient. Analysis of past recessions by Goldman Sachs shows that earnings typically fall about 30% across listed companies during a slowdown.

Nonetheless, blackmailing your team members has an adverse effect. In a competitive jobs market where it is harder than ever to source talent, the focus should now be on retention. 

Savvier leaders have discarded the ‘slash-and-burn’ technique, recognising it leads to disengaged workforces, high turnover, and reduced quality control. 

There are better role models to look towards than Musk, after all. Like Dan Price, the CEO who took a 90% pay cut to raise his staff’s minimum salary to $70K. Six years later, the company is now thriving.

For small businesses, which don’t have Meta’s cash flow and brand recognition to fall back on, taking an employee-first approach is even more important.

UK SMEs are already battling a Hydra-like set of challenges. The issue of Brexit has re-emerged to replace COVID-19, itself joined by a twin global supply chain and energy cost crisis. 

Employers and employees alike are teetering on the brink of disaster, so any insensitivity towards financial difficulties could be a fatal blow. Pointing guns at staff job security is almost certainly not the solution.

I’ve written previously about the importance of keeping your employees engaged with the company mission during a challenging economic climate. 

There is overwhelming evidence that teams who are respected, cared for, and motivated will be the most productive with the most output. Indeed, the Workplace Research Foundation found that employers who invest in engagement initiatives are 38% more likely to have above-average productive workforce.

Tailored benefits packages, developed corporate values, strong organisational culture; these are the factors that motivate today’s job seekers. Without them, hiring and retaining talent would all but disappear. Indifferent workers would simply move onto the next, more attractive job offer.

Those who remain would be left in an unstable working environment, where alternative protest methods might emerge. Like the trend of ‘quiet quitting’, where practitioners refuse to meet more than the minimum requirements of their job description. 

Even more extreme is the real risk of strike action – the evidence of which is all around. 

More than two million working days were lost to industrial action in 2022 – the most significant wave of staff revolts since the 1980s miners’ strike – and as the Amazon warehouse strikes show us, big tech won’t be immune from big protests.

One thing is certain: by holding staff hostage to intense performance review pressure, Meta has laid down a path that will end in mass quittings and an inevitable hit to profitability. For their own sakes, SMEs must not follow in its footsteps.