Meta CEO Mark Zuckerberg is embracing a new reality. His company — which for over a decade has raked in more and more profit, users, and stock market gains year after year — isn’t growing as quickly anymore.
“We’re in a different world, and we needed to make some changes. But I made those calls,” Zuckerberg said in his opening remarks before addressing employee questions in a staff-wide Q&A on Thursday morning.
Zuckerberg’s comments come a day after the company laid off 4,000 employees as part of the CEO’s planned “year of efficiency.” These belt-tightening measures are just the latest in a series of layoffs, with more scheduled for May. In a recording of the meeting obtained by Vox, Zuckerberg acknowledged employees’ “anger and frustration” at the ongoing waves of mass cuts and answered several questions about whether leadership was being held accountable for the company’s current position.
“People want to point to whose fault is this or what’s to blame or what were the mistakes,” Zuckerberg said at the meeting. “But at some level, it is sort of natural that you’re not going to be in hypergrowth forever. When you’re not, you want to shift the moment.”
Even if a company goes from growing at 40 to 50 percent a year to 10 or 15, Zuckerberg said, “that’s great too” — as long as it can adjust.
The exchange was a reflective moment for Zuckerberg, who has been trying to change Meta’s work culture toward greater efficiency for several months and now seems to be positioning Meta as entering a new chapter of its history. The 38-year-old repeatedly said that the company is working under a different “operating model” — one marked by tighter budgets, slower hiring, and fewer layers of management.
This new rhetoric is a sign of how much Meta’s fortunes have changed since the company formerly known as Facebook enjoyed its heyday of unstoppable growth and free spending. In recent years, Facebook and Instagram have faced stiff competition from TikTok, shrinking advertising budgets, and regulatory pressures that have slowed down business. Meanwhile, the company’s long-term bet on the metaverse is still far away from becoming a reality. “Last year was a wake-up call, and our growth slowed considerably — the first time that our growth was negative year over year,” Zuckerberg said. “And while I expect that we’ll be growing moving forward, we’ll be growing at a more normal rate.”
Zuckerberg also confirmed some previously unreported details about the layoffs: Twenty percent of managers were cut, he said, in order to “flatten” the company, and other managers are being asked to change their jobs to be individual contributors.
In the Q&A, Zuckerberg repeatedly took responsibility for the layoffs and answered tough questions, and at one point, expressed some personal regret.
“In retrospect, obviously, do I wish I’d seen some of these trends sooner and not have to do this?” he said, referring to the layoffs. “Of course. Of course.”
But Zuckerberg largely blamed factors outside of his control for Meta’s cuts, saying, “The last few years has been sort of unprecedented volatility with everything around Covid, the macroeconomy, wars, and different things. So I do think having a little bit of humility, or what is possible for people to kind of predict and understand in advance — I wish I had — but I know that there were a lot of other people in that same zone, too.”
Zuckerberg argued that the real “mistake” would be continuing to act as though Meta were still in a period of “hypergrowth for a lot longer.” A lot of “other peers in the tech industry,” he said, “may be doing [that] by not making such big adjustments.”
At the end of the call, Zuckerberg tried to end on an optimistic note, making the case that Meta — which he said is still investing in the metaverse and AI — will lead on these technologies, in part because of the company’s massive reach. Meta’s apps, like Facebook, WhatsApp, and Instagram, are used by over 3 billion people every day.
“I think when this settles, at the end, we will be in a better position to continue executing on what I think is one of the most transformative times in the industry in terms of new technologies getting developed,” Zuckerberg said. Meta, he said, is well-suited to “be building them into products at a scale that just no one else can reach anywhere else.”
The question is whether this new era of more normal growth will be enough to sustain Meta into Zuckerberg’s promised metaverse future.