Why tech companies are laying off right now? Mark Zuckerberg’s ‘Covid’ theory

Meta CEO Mark Zuckerberg said that many tech companies may be laying off employees as they are realising that there are many benefits to being “leaner”. On Morning Brew Daily’s podcast, Mark Zuckerberg said that companies are still adjusting to the post-Covid era. Owing to the pandemic, e-commerce sales increased which increased gains in online advertising but when people returned to stores, these sales growths declined– making companies realised that they had over hired and the next step was to initiate major cuts in their staff, he said.

Mark Zuckerberg on layoffs: Meta CEO Mark Zuckerberg.(Reuters)
Mark Zuckerberg on layoffs: Meta CEO Mark Zuckerberg.(Reuters)

“In terms of the layoffs and stuff like that, I actually think that was more due to companies trying to navigate Covid,” he said.

Discover the thrill of cricket like never before, exclusively on HT. Explore now!

But now these companies are realising that it is better to have less staff as even though initially tech companies were reluctant to make cuts, they realized it didn’t spell the end for them, Mark Zuckerberg reflected.

“It was obviously really tough, we parted with a lot of talented people we cared about,” he said in the interview, speaking about Meta’s past layoffs.

“But in some ways actually becoming leaner kind of makes the company more effective”, he added, continuing that Meta has been making a comeback after cutting jobs in an “year of efficiency” as the company has been chopping management layers.

Instagram has been eliminating technical program managers- a role which is also being reportedly cut back across other parts of Meta.

This is because companies are still in the mode of thinking about efficiency, Mark Zuckerberg said. Some companies are also restructuring, flattening out management levels and transitioning completely to a leaner model, he said as Microsoft and Google have downsized despite solid earnings.

But AI might not be a big part of the equation as “at least for us, the AI stuff was not a major driver for tha. 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,” he said.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it’s all here, just a click away!- Login Now!
Stay informed on Business Newsalong withGold Rates Today, India News and other related updates on Hindustan Times Website and APPs

Leave a Reply

Your email address will not be published. Required fields are marked *