As Meta cuts jobs – is it all over, I love business euphemisms, those cute little phrases and semantic workarounds the executive class uses to cloak behaviour inimical to its employees. Like sacking them or demanding more work for the same pay.
By Ellie Brown, Marketing Executive
Retrenchment was the first one I came across as a fully (under)paid-up member of the global workforce. It’s from the French retrancher, meaning to cut down. I was retrenched myself once you see, a curious experience given that I’d never before heard the word. But ignorance was no defence against the action itself, and my jotters were promptly delivered into my ungrateful hand. Still, tele-marketing’s loss is journalism’s gain, right?
Since then I’ve collected examples of the form. Downsizing is a good one, though my favourite to date is dehiring. To my connoisseur’s eye, it’s kind of beautiful. Rolls off the tongue like the 25-year-old malt they serve in the boardroom after the dust has settled and the dehiring done.
Mark Zuckerberg, head of Meta, which was formerly Facebook, came out with a doozie recently: the Year of Efficiency (YoE). What does it mean? What it says on the digital tin: a 12-month spell (i.e. a tax year) in which the company will strive to make efficiencies.
What it really means, according to Fortune magazine, is “another 10,000 layoffs and a hiring freeze on 5,000 more jobs” – and this only five months after Meta canned a 11,000 employees, which then was around 13% of its workforce.
Oh, right. Those sorts of efficiencies. That sort of year.
Entertainment industry magazine Variety resorted to its own version of the business euphemism when it wrote that Meta was “pink-slipping” employees, an Americanism relating to the coloured form traditionally used by personnel departments to, well, you know.
Mr Zuckerberg announced the YoE in a staff memo riddled with yet more puzzling phrases. “Tooling” is to be increased, he wrote, and “hierarchy” decreased (it “adds latency” apparently). However “buffer capacity” will be maintained (phew!), and among the “parallel workstreams” to be undertaken in the YoE is one which will “garbage collect unnecessary processes”. Oh, and remember: “Flatter is faster”.
Can’t speak for billion-dollar tech companies, but it’s certainly not true of bicycle tyres. That much even I know.
It was already a bad week for Mr Zuckerberg and Meta before the announcement that 10,000 people were to be pink-slipped/retrenched/escorted from the building carrying a cardboard box and a sad looking cactus they got in Urban Outfitters.
On March 13, financial news company Bloomberg reported claims that Meta employees, Mr Zuckerberg among them, knew social media platforms such as Facebook and Instagram were harmful to children and teenagers. The allegations are part of an ongoing lawsuit concerning social media addiction and came to light when previously redacted sections were helpfully unredacted in papers filed at a California court.
Track back from that and it has been a bad week for tech generally. Actually make that a bad year. So far in 2023 here have been significant job cuts at PayPal, Reddit, Spotify, game publisher Take-Two Interactive, digital news site CNET and digital media company Dotdash Meredith. Meanwhile the ongoing job cuts at Twitter have continued after about half its 7500 strong workforce was sacked in October, and Variety reports that between them Amazon, Microsoft and Google (through parent company Alphabet) dispensed with 40,000 workers in January alone.
No wonder Jeff Bezos and Elon Musk are so desperate to go into space (though Richard Branson has given up, it seems – last week he mothballed Virgin Orbit and put the staff on unpaid furlough).
Here’s a phrase for which there is currently no good business euphemism: bank crash. Based on a not-very-scientific theory I’ve just cooked up, these come along every 16 years.
You may remember the last one. In fact you may even have queued for it – that is if you were unlucky enough to have savings in the Northern Rock, which found itself the subject of a ‘run’ in September 2007 after shares in the lender tanked. It was an unsettling experience, something most Britons thought only happened in other countries or in Ye Olden Days Of Black And White TV.
You could write a book about the underlying reasons for it. Uber-brainy World Bank economist Joseph Stiglitz did just that, aptly titled Freefall. Basically it was all to do with what became known as the global financial crisis of 2007-2008, itself a consequence of the American sub-prime mortgage crisis which caused the collapse of hundreds of banks. The highest profile casualties were the Washington Mutual Bank, still the biggest bank failure in US corporate history, and financial services firm Lehman Brothers.
Another decade, another bank run. This time it’s Silicon Valley Bank (SVB) which has collapsed. With over $2 billion in assets, it’s now the second-largest bank failure in American history. Worryingly, the bank in third place in the Top 10 List Nobody Wants To Be In is Signature Bank, headquartered in New York. It failed on March 12, two days after SVB, with assets of $118 billion.
Spooked by SVB’s collapse, shareholders in Credit Suisse deserted that bank last Wednesday. Its shares hit the floor as a result. Over the Pond, First Republic Bank suffered a similar stock collapse. At the time of writing, First Republic was in rescue talks and, though Credit Suisse stock had recovered after Switzerland’s central bank reached into whichever pocket contains its wallet, by Friday the shares had fallen back. The bank now qualifies for the epithet “troubled”.
Still, do you sense a pattern here? Many do. As the saying goes, there is now “fear of contagion”. And not the sort you can head off with a face mask and some Bubble Gum flavoured hand gel. Adding to the mounting sense of panic, European Central Bank president Christine Lagarde has come out and done a Captain Mainwaring number by telling everyone, er, not to panic.
Latterly, Signature Bank was focussing on crypto-currency. SVB, as the name suggests, was the lender of choice for many technology companies. Among them was streaming platform Roku, which had $500 million tied up in the bank. Hilariously, some have even managed to turn the SVB collapse into a new front in the culture wars.
Now let’s rewind to the top of the article – I told you Meta was sacking thousands of workers, remember? – and see what’s going right for Mark Zuckerberg. At the moment, the answer is not much.
Profits at Meta have been hit, with net income down 55% last year. Likewise the company’s share price. Mr Zuckerberg pinned his hopes on the so-called metaverse, his vision of a 3D internet in which users can interact with each other through virtual reality. He spent billions developing it but the response has been lukewarm (not helped by the fact that avatars in it have no legs). New York Magazine recently ran an article on the metaverse headlined: “Searching for friends in Mark Zuckerberg’s deserted fantasyland”. Kind of sums it up, really.
So are the apparently unassailable tech titans on their way out? Are the days of profits once described as “pornographic” soon to be over? Are their very presence going to become a new front in the culture wars? Donald Trump, that prime exemplar of business acumen, chipped in his tuppence worth last week. “SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices,” he said.
And is Meta going to be the next AOL? The question was asked by a former tech CEO interviewed by CNN Business after news of the Meta dehiring programme was released. AOL, an internet pioneer in the 1990s, became so big and valuable it bought Time Warner in February 2000 in what was then the biggest merger in US corporate history. A few months later, pop! The so-called dot-com bubble burst. AOL effectively disappeared off the digital map.
Could it happen again? Maybe. We’ll know for certain the day the kids start asking: “Grandad, what was Facebook?”
