Mark Zuckerberg Goes to the Elon Musk School of Management

Mark Zuckerberg Goes to the Elon Musk School of Management

mark zuckerberg and elon musk

Meta Platforms CEO Mark Zuckerberg sounds a little like Tesla CEO and Twitter owner Elon Musk when talking about labor.

In a Tuesday update on Meta’s “Year of Efficiency,” Zuckerberg wrote: “Our early analysis of performance data suggests that engineers who either joined Meta in-person and then transferred to remote or remained in-person performed better on average than people who joined remotely.”

Musk doesn’t seem to be a fan of remote work either.

“Anyone who can be in office, should be,” tweeted Musk in November, shortly after taking over Twitter. “However, if not logistically possible or they have essential personal matters, then staying home is fine. Working remotely is also ok if their manager vouches for excellence. Same policy as Tesla and SpaceX.”

Zuckerberg added: “Over the next couple of months, org leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates.”

Musk was first to flatten, cutting deeply at Twitter shortly after taking over. He laid off roughly 50% of the workforce. He had his reasons: “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4 million a day,” tweeted Musk in November.

Meta plans to lay off about 10,000 workers this year, or about 11% of its workforce of about 86,500 at the end of last year. It’s smaller than Musk’s cut, but larger than other tech firms have announced.

Google parent Alphabet (ticker: GOOGL) is cutting 6% of its workforce. (AMZN) and Microsoft (MSFT) announced cuts amounting to about 1% and 5% of their workforces, respectively.

Meta also laid off about 11,000 employees last year. That amounted to about 15% of the workforce at the start of that year.

Meta has good reason to cut a little more deeply. It is the only firm out of a group including Amazon, Google, and Microsoft to generate less sales per employee in 2022 than it did in 2017.

Musk’s other company, Tesla (TSLA), has improved productivity by about 100% since 2017. It did that by selling more cars.

Growth makes comparing Tesla to other auto makers difficult. Tesla generated about $637,000 in sales per employee in 2022. General Motors (GM) and Ford Motor (F) generated sales of about $939,000 and 914,000 per employee, respectively, this past year.

Even Tesla can get more efficient. It should as it delivers more cars from its new plants.

Lately labor has been more in focus as the U.S. continues to add jobs while the big tech firms announce layoffs. It is a paradox for investors to work out. Either the big tech firms are a canary in the coal mine, a sign that things will get worse for the U.S. economy, or the layoffs are a sign that big tech over-hired during Covid.

Or maybe Elon Musk was right and big tech firms just don’t need as many employees as they thought.

Meta Platforms stock closed up 7.3% while the S&P 500 and Nasdaq Composite

Through Tuesday trading, Meta stock was up 61% year to date. Investors have been happier with management’s cost controls.

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